TLR 190- Under the Radar: the Monetarist Counter-Revolution

February 26, 2019

 

There is a plethora of topics to write about — more than has been the case in quite a few years. The most obvious and seemingly urgent is the political arena and the election campaign underway. In that area, however, I am primarily using verbal communication channels — conference calls and individual conversations — if only because the pace of events is so rapid that written analysis suffers from almost instant obsolescence.

 

Meanwhile, I have come to the conclusion that a major development in economic policy, which found immediate and significant expression in the financial markets, has simply passed many people by — both in Israel and abroad. By no means everyone has missed this — otherwise there would have been no reaction in the market. But a surprisingly large number of economists, as well as corporate executives, have allowed this important development to “fly under their radar screens”.

 

This issue seeks to ‘expose’ this development. It starts by presenting the recent strength of the Israeli shekel and asking what has caused it. The answer proves to be clear and actually easy to identify, but the focus then moves from the narrow cause-and-effect to wider considerations of background and implications, which are quite fascinating.

 

Inevitably, perhaps, the discussion leads back to politics and to the successes and failures of Binyamin Netanyahu, this time in the sphere of economic policy. He may be on the way out, but he continues to dominate the Israeli public sphere.

 

 

Contents

 

 

E: Local markets & C: Macro-Economics

 

  1. ‘Autonomous shekel strength’

 

  1. A new sheriff comes to town

 

  1. Thus spake Yaron

 

  1. Interest rate policy

 

  1. Netanyahu’s legacy

 

 

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