Cyclicality of fiscal policy in Israel

Michel Strawczynski, Joseph Zeira

Research output: Contribution to journalArticle


This paper tests the cyclicality of fiscal policy in Israel. We find that government deficits are mildly counter-cyclical, mainly in recessions. Expenditures, and in particular, public investment, are pro-cyclical. However, we find that both the government deficit and expenditures have become more counter-cyclical after 1985, a period that is characterized by improved fiscal discipline, following the Economic Stabilization Program. We interpret this result as an indication that Israel is nowadays in a transition from pro-cyclical fiscal policy, as in many developing countries, to
counter-cyclical fiscal policy, as is more common in developed countries.
Original languageEnglish
Pages (from-to)47-66
Number of pages20
JournalIsrael Economic Review
Issue number1
StatePublished - 2007

Bibliographical note

Previously published as a discussion paper in:
Discussion paper series / Bank of Israel Research Department, Volume: no. 2007.4.

RAMBI Publications

  • Rambi Publications
  • Israel -- Economic conditions


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