The OECD (Organisation for Economic Cooperation and Development) aims at providing support to the member countries to restore confidence in their market and institutions and foster new sources of growth through technology and innovation which would provide a basis for sustainable future economic growth. The data analysis provided by OECD regarding the major economic indicators of the member country Israel will provide a clear picture to its institutions and organisations about the current scenario of the economy and help them to propose appropriate solutions through the application of economic theories and practices. This report examines the macroeconomic aspects and policy issues faced by Israel and provide a relative framework and recommendations on how to support development in the country through successful integration of business organisation and public interventions. The report also highlights the economic outlook and forecasts of Israel through the analysis of relevant economic parameters provided by OECD. It was found that though Israel’s economic growth slowed down in 2014, but it again picked up at the end of the year and has been experiencing positive growth since then due to substantial investments and public intervention.
OECD works with the prime motive of providing information on a wider range of topics to provide assistance to the government and other institutions of a member country to formulate appropriate polices that can help them to foster growth and stability in the economy. This report analyzes the major indicators of economic performance of Israel. The data of major economic indicators of Israel are collected from OECD and can be used to analyze how the growth and performance of the country can be improved based on its reports. There are variety of economic indicators like agriculture, energy, finance, governmental interference, employment, technology and research, health and environment on the basis of which OECD analyzes the performance and growth of Israel. The report also provides a relative framework for understanding the role of government and local organisations in their contribution towards long term growth and efficiency of the economy.
1.0 Economic Principles and Theories that Regulate the Growth of Israel
The basic economic theories of demand and supply mechanism cost of production and elasticity of demand and supply contributes towards organisational and business thinking of a country. It is a challenge for the economists to explain how countries prosper in terms of GDP even if there was prevailing poverty and unemployment. A country’s GDP is facilitated by the division of labour and better organisational structure of the major sectors of the economy (Rader, 2014). The general economic theory of market states that, rise in aggregate demand in an economy can lead to rise in price level and supply which ensures market equilibrium (Dosi, Fagiolo and Roventini, 2010). The neo-classical theory which gives importance to the state intervention in restoration of market equilibrium in the economy is relevant for Israel as the government plays a principal role in performance of the market. Israel has now emerged as a developed economy instead of global economic crisis, due to substantial government support and participation. According to Boianovsky and Hoover (2009), the growth models of Kaldor and Young explains the concepts of increasing returns to scale and implications of knowledge on the productivity of an economy.