BOI study: Exports drive economic growth [pg. 18]

By LEAH GRANOF
January 8, 2007 21:07
1 minute read.

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

Israel's exports constitute one of the driving forces behind its economic growth, a new report by the Bank of Israel concludes. The report, by BOI researcher Salem Abu Za'id is one of the first studies to examine the effects of the country's exports on its gross domestic product, or GDP, and conclusively proves that there exists a strong positive and causal link between Israel's exports and the strength of its GDP. One of the reasons for the correlation is that exporters face stiff global competition, forcing them to maximize their productivity in the most efficient manner. A country's productivity, the study notes, also correlates positively to its GDP. Economists determine a country's Total Factor Productivity (TFP) by examining the combination of capital and labor in the market. By these parameters, Israel's productivity comprised only 12 percent of its GDP in the last decade, down from nearly 50% in the 1960s, the study documents. Such a decrease is not cause for alarm, researchers at the BOI explained, as high productivity typically characterizes young countries since their ability to increase capacity is much higher than more established countries. Israel's exports, in fact increased by 8.9% (excluding diamonds) in 2006 from 2005 for a total of $52 billion. Exports of technology and goods services helped to boost the growth. Although the BOI sponsors such studies through its research department, it says the views expressed in the studies do not always reflect those of the central bank.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS