Studies the effect of Israel's war of attrition with the Palestinians on Israel's economy.
Written in 2002; 2,065 words; 5 sources; APA; $ 65.95
Paper Summary:
The writer compares the Israeli economy with the macroeconomic model pertaining to the circular flow of money through the economy, observing that the contraction occurring among the main economic actors (households and business sector) is not being reflected in the conduct of the Israeli government. The paper argues that the government is forced to maintain its level of military expenditure to counter the increasing level of violence the war is generating. With Israel's contribution to the international export markets evaporating combined with decreasing business sentiment and consumer confidence, not to mention increasing dependence on the U.S. for foreign aid, the future of Israel's economic health does not bode well. The paper also argues that Israel needs to establish true peace before it can hope to overcome its economic recession.
From the Paper:
"Israel is an economy that has previously defied economic forecasts. Up until recently, its economy did not comply with the normal prerequisites for success. However, with the escalating presence of its war of attrition with Palestine, the factors that were once driving its economic growth and defying its detractors, is now slowly being eroded by its increasing commitment to fighting Palestine. This paper endeavors to explore the factors that once drove Israel's economic growth and the aspects of the Israel-Palestinian war that are now hampering Israel's economic health. By comparing the case of Israel to standard macroeconomic models, one can observe the unique case posed by Israel's economy."
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