The Bank of Israel holds a conference on the inflation target in Israel—past, present and future

The Bank of Israel is holding a conference today on the topic of “The Inflation Target in Israel—Past, Present, and Future”. The current inflation target of 1–3 percent was established in the beginning of the 2000s. After many years in which the target was not changed, and as part of the strategic plan plan first announced bythe Governor  in September 2019, the Bank of Israel is examining whether to keep the price stability target as it is presently defined, or whether it should be adjusted. Should the Bank conclude that there is room to change the current target, it will recommend to the government to act accordingly. Within the framework of the process, the Bank of Israel today is holding a professional conference for the public.

 

The Conference was opened by Governor of the Bank of Israel Prof. Amir Yaron(LINK to his full remarks) and Research Department Director Prof. Michel Strawczynski.

 

Prof. Michel Strawczynski said, “The Bank of Israel’s learning process includes writing many research papers that make it possible to understand central points on the inflation target regime in Israel. The long and rich experience of about 20 years in which the economy has had price stability makes it possible to designate the inflation target regime as successful, and at the same time to learn the main issues that have to be emphasized looking ahead. It is particularly important as well to learn from advanced economies that went through a process similar to ours.”

 

As part of the process, the Bank of Israel conducted a survey to examine the knowledge and views of the Israeli public on the issue of inflation and the inflation target. For more information on the Survey, click here.​

 

Afterward, Dr. Sigal Ribon gave a presentation describing the process of inflation in recent decades and a view of inflation targets around the world. Attached is a LINK to her remarks and presentation.

 

The Conference included a guest lecture by Lawrence Schembri, who until recently served as Deputy Governor of the Bank of Canada. He spoke about the insights gained from a similar process recently held in Canada:

“The inflation target is a framework that worked well and contributed to good economic performance. Canada consistently examines the monetary policy framework and the inflation target every five years. The last examination was carried out in 2021 and was held against the background of the low interest rate and low inflation rate environments following the 2008 crisis, and the difficulty in measuring and achieving full employment. As a result of the examination, it was decided that low and stable inflation would again be the main target of the central bank and the definition of price stability remained unchanged at 2 percent, with a control range of 1–3.”

 

Later in the Conference, the Chief Economist at the Ministry of Finance, Ms. Shira Greenberg, spoke.

 

The Conference ended with an expert panel, with the participation of:

 

n, Head of the Economics Division at the Manufacturers’ Association; Adam Bloomberg, Deputy CEO for Economics at the Histadrut (General Federation of Labor)

Ofer Klein, Head of the Economics and Research Department at Harel

Prof. Elise Brezis of Bar-Ilan Universit

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