Some Applications of Input-Output Techniques to the Analysis of the Structure and Development of Israel’s Economy

The following survey discusses some of the uses of input-output techniques in the analysis of the structure of the Israeli economy and of its future development. The present phase of input-output work in Israel started in 1959 as part of the Bank of Israel’s project on long-term development forecasting. 1 An analytical framework was needed by which the consistency of long-term sector plans with each other and with over-all policy objectives and factor limitations (such as a reduction in the foreign currency inflow and maintenance of full-employment growth) could be checked. At the same time this tool was supposed to serve as a means of forecasting production and investment by sector and their respective contribution to the balance of payments. An input-output model was considered the most suitable tool for this purpose, especially in view of the importance of impending changes in the composition of demand between broad final demand categories (increasing exports relative to domestic consumption) as well as between sectors of production (increasing manufacturing relative to agriculture and housing, and some branches of manufacturing more than others). These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.