A macroeconometric model for Israel 1962-1990. A market equilibrium approach to aggregate demand and supply

Michael Beenstock*, Yaakov Lavi, Akiva Offenbacher

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

We report the specification, estimation and simulation of a macroeconometric model of the Israeli economy. A distinctive feature of the model is the clear articulation of markets in terms of supply, demand and price determination. The principal markets consist of output, labor, exports, credit, money and foreign exchange. All markets are assumed to clear in the short run except the labor market which clears in the long run. The product market solves for product and for the price level relative to the exchange rate. We suggest that this is a sensible procedure for inflation-prone economies. The attention to both supply and demand imparts a 'classical' flavor to the model which is fundamentally different from earlier 'Keynesian' attempts to model the Israeli economy.

Original languageEnglish
Pages (from-to)413-462
Number of pages50
JournalEconomic Modelling
Volume11
Issue number4
DOIs
StatePublished - Oct 1994

Keywords

  • Israel
  • Macroeconometric model
  • Supply

Fingerprint

Dive into the research topics of 'A macroeconometric model for Israel 1962-1990. A market equilibrium approach to aggregate demand and supply'. Together they form a unique fingerprint.

Cite this