Abstract
Q e e( ect of war on domestic economic indicators has been repeatedly explored in many countries and regarding di( erent eras. Q e current study focuses on the Is- raeli economy during the Second Lebanon War, which erupted in 2006, and shows the contribution of Israel's advanced industry to the resilience of the local economy during that period. Q is resilience is clearly manifested in the Gross Domestic Product (GDP) indicator, which continued to grow at an increasing rate despite the war and unlike previous wartime eras experienced by Israel .Q e explanation of the change in the behavior of the GDP during the Second Lebanon War versus its behavior during previous wars is rooted in the striking technological transformation experienced by the Israeli economy from the mid-1990s until the onset of this war. Q e transformation resulted from the rapid and consistent development of Israel's advanced industry, with its high recognized contribution to the Israeli economy's total GDP, both in absolute terms and relative to other industries .Q e paper presents data attesting to this contri- bution and portraying its high probability.
Highlights
E research literature includes many publications indicating the relationship between war and various economic indicators and portraying the various factors a ecting this relationship1 (Collier, 1999; Yang & Lester, 1994; Stubbs, 1999; Lee, 1997, and more). e current study brings evidence of another factor affecting the economic resilience of a country at war, which helps it cope with the damages in icted by war and moderates the negative consequences of war for the economic indicators. e research claim is that an economy with a stronger and more developed advanced industry will show greater stability and resilience in the face of economic damages in icted by war. e study focuses on the Israeli economy since, on the one
Some have claimed that war has a direct and immediate harmful e ect on domestic economic indicators, since the belligerence paralyzes or at least moderates overall consumer activity. e diminishing of consumer activity has a direct e ect on production in the economy and leads to its reduction
Others claim that war appears to be associated with extensive military spending, leads to a rise in public expenditures, and o sets the drop in the other Gross Domestic Product (GDP) indicators, creating a positive e ect on the country’s total GDP. ese studies are supported by the economic data of countries at the time they were involved in wars and subsequently, clearly indicating the positive e ect of the con ict and ghting period on the economic indicators of these countries and mainly on the GDP and unemployment indicators (Yang & Lester, 1994)
Summary
Erez Cohen “ e E ect of Advanced Industry on the Resilience of the Economy during War e Israeli Hi-Tech Industry as a Case Study ”, Journal of International Studies, Vol 7, No 2, 2014, pp. 9-24.
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