Summary
Economist whom Grinberg credits with the political insight behind Israel’s 1985 stabilization: in an interview with Grinberg and Michael Shalev, Bruno explained that the Likud governments failed to halt inflation because they misunderstood the Histadrut’s crucial role, and that negotiation with the Histadrut was crucial to the stabilization program’s success (Moments of Resistance, PDF p.193, note 12).
Details
- Bruno headed the exchange-rate-freeze camp on the Emergency Economic Stabilization Plan team in 1985, arguing the government should stop using devaluation to protect employers against wage increases and force employers to confront employee demands or pay themselves (PDF p.207-208).
- Appointed Bank of Israel governor in 1986, he held the exchange rate constant against exporter pressure to devalue, a policy Grinberg calls critical to the plan’s success, combined with relatively high interest rates that bankrupted many firms, particularly in agriculture and construction (PDF p.212).
- Evidence in the work indicates, on Bruno’s interview account, that the economic team consciously manipulated the June 1985 foreign-reserve figures to exaggerate the crisis and force the politicians to adopt the plan (PDF p.207, note 20).
Related pages
Moments of Resistance, Emergency Economic Stabilization Plan, Histadrut