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SRAEL is a snail, opesm economy with a populatiosm of about 4 mnilliomm ammd a per capita national incomne imm 1981 tuf abotmt 85.400. m F’tur a long period, ummtil ti-me beginning of time 1970s, it Imaci experienced relatively loxv inflation amid! high real ectuntmmnic acimievenmemmts in terms ofempituymemmt. econtunmic grtuwth anti commsumnp— tion. During the 1970s; however, Israel’s ecom-momic performnammce deteriturated simarpiv: reai CNP growtim fell frommm aluout 9 percemmt to 3 percemmt per ~‘ear, am-md ti-me rate of inflatiomm acceierated drammmaticaHv ttu over 100 percemmt per year (ummemnpioy’mmmemmt, Imowever, remmmained relatively iow for mmmost of time decade). At the sammme time, ti-me imm-mport surplus — the difl’eremmce betweerm ti-me valmme of immmports am-md exports — rose to leveis ti-mat were considered unmnaimmtaimmable in ti-me ltung rmmmm (see tables 1 and 2).2

Money and Inflation in Israel: The Transition of an Economy to High Inflation