Amir Yaron

Yaron was born in Israel in 1964.[1] He earned a bachelor’s degree in economics and sociology from Tel Aviv University in 1985, graduating magna cum laude, and a master’s degree in economics there in 1988, graduating summa cum laude.[6] At the University of Chicago, he received another master’s degree in economics in 1992 and completed his doctorate in December 1994.[6] His doctoral adviser was Lars Peter Hansen, who received the Nobel Prize in Economics in 2013.[1]

Yaron served as a captain in the Israel Defense Forces and worked in the financial-adviser unit to the Chief of Staff.[7] Recalling his earlier interests in a 2026 interview, he said that he had originally intended to study engineering, had studied some architecture, and had windsurfed until a shoulder injury ended that activity.[8]

Yaron began his academic career as an assistant professor of economics and finance at Carnegie Mellon University’s Graduate School of Industrial Administration, serving there from 1994 to 1997.[6] He joined the Wharton School in 1997 as an assistant professor of finance, became a tenured associate professor in 2004, and held a term associate professorship from 2007 to July 2009.[6] From July 2009 until his appointment as governor, he held the Robert Morris professorship in banking and finance; he also became a secondary professor of economics at the University of Pennsylvania in 2016.[1][6]

His research interests included asset pricing, investments, risk-return strategies, macroeconomics, and finance, with applied time-series econometrics also identified among his specializations.[6][7] He was a faculty research fellow at the National Bureau of Economic Research from 1999 to 2003 and a research associate from 2003, becoming co-head of its Capital Markets and the Economy Group in 2012.[6] His professional service included co-editing Finance Research Letters from 2003 to 2012 and the Review of Asset Pricing Studies from 2010 to 2014.[6] By the time of his nomination as governor, he was also a board member of the Dovrat Economic Policy Center.[7]

With Duke University economist Ravi Bansal, Yaron coauthored “Risks for the Long Run: A Potential Resolution of Asset Pricing Puzzles,” published in the Journal of Finance in 2004.[4] The paper was a lead article and received the 2004 Smith-Breeden Paper Award.[6] In 2019, it received the $100,000 Stephen A. Ross Prize in Financial Economics.[4]

Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon announced Yaron as their preferred candidate for Governor of the Bank of Israel on October 9, 2018.[7] The government approved his appointment on November 18, and he took office on December 24 at a ceremony at the President’s Residence in Jerusalem attended by Netanyahu, Kahlon, and President Reuven Rivlin.[2][9] He succeeded Karnit Flug, who had retired after five years as governor; Deputy Governor Nadine Baudot-Trajtenberg served as acting governor during the transition.[2][10]

At the time of his appointment, Yaron held dual Israeli-American citizenship and had spent approximately two decades in the United States.[2] He described returning to Israel for the governorship as the peak of his professional career and said that he wanted to strengthen the economy and its continued growth so that citizens could share in its benefits.[10] He praised Flug for leaving an excellently managed institution.[10] In a later account of the family’s move, he said that he and his wife had left two children in the United States for a time and managed the separation across a substantial time difference.[8]

The governorship combines management of the Bank of Israel with chairmanship of its Monetary Committee, membership of its Administrative Council, and responsibility for advising the government on economic matters, including reducing social gaps and income inequality.[11] The governor is appointed by the president on the government’s recommendation for a five-year term, with one reappointment permitted.[11] The Bank’s responsibilities include monetary policy directed toward the government’s inflation target and support for growth, employment, and financial stability; the 2010 Bank of Israel Law assigned interest-rate and monetary-policy decisions to the Monetary Committee.[12]

At Yaron’s installation, Netanyahu identified greater banking-sector competition and prevention of a credit bubble as principal objectives.[9] Rivlin emphasized price stability and the Bank’s role as an economic adviser to the government.[9] On November 20, 2023, Netanyahu and Finance Minister Bezalel Smotrich agreed to offer Yaron a second five-year term, which he accepted; the decision was to be submitted to the cabinet.[13] His original term had been due to end on December 24, 2023.[13]

During Yaron’s first term, the Bank of Israel raised its benchmark interest rate from 0.1% in April 2022 to 4.75% in May 2023 to combat inflation, then held it at that level for several months.[5] The Bank’s 2022 annual report recorded economic growth of 6.4%, inflation of 5.3%, and a 4% depreciation of the shekel.[14] Looking back on his first five years, Yaron described them as among the most challenging for an Israeli central banker, citing repeated elections, the COVID-19 pandemic, the Russia–Ukraine war, inflation, and the proposed judicial overhaul.[5]

On October 9, 2023, as war began following the October 7 attack, the Bank announced that it would sell up to $30 billion in foreign currency and make up to $15 billion available through swap mechanisms.[3] The measures were intended to moderate exchange-rate volatility and maintain liquidity so that markets could continue functioning properly.[3] By December 27, less than $10 billion of the announced foreign-currency allocation had been used.[15]

In a December 2023 interview, Yaron explained that the intervention sought market stability rather than an exchange-rate ceiling, and said it had helped stabilize bond and equity markets.[16] He described the guiding objective as preventing an external shock from developing into an economic event and then a financial crisis.[16] A loan-deferral plan developed shortly afterward gave residents of the Gaza-border area greater certainty; Yaron likened its effect to a one-time interest-rate reduction.[16]

Other wartime measures included support for a commercial-bank plan to ease customers’ credit and banking-fee burdens and a loan program for small businesses affected by the war.[17] The economic pressures included displacement, reserve mobilization, inaccessible agricultural and industrial areas, restrictions on foreign workers, slower GDP growth, and a widening deficit.[17] Yaron also called early in the war for a committee to assess changing security requirements and help shape an appropriate budget.[17]

In April 2024, Yaron said that the Bank was observing rising exports and improvements in business-trend surveys, purchase orders, and high-tech indicators.[18] By October 21, 2026, the Bank had made three consecutive interest-rate cuts before holding its benchmark rate at 3.25%, a decision Yaron described as appropriate amid geopolitical and fiscal uncertainty.[19] He urged the next government to balance security spending, debt reduction, and growth-enhancing investment, while pursuing more efficient public spending and a broader tax base through higher employment and productivity.[19]

At that time, the Bank raised its growth forecasts to 5.6% for 2026 and 7.5% for 2027.[19] Yaron cautioned that overseas production by Israeli companies accounted for a substantial part of the revisions and could distort the picture of domestic economic activity.[19]

In 2019, Yaron met U.S. Treasury Secretary Steven Mnuchin to discuss Israel’s economic outlook, anti-money-laundering and counter-terrorist-financing priorities, digital assets, fintech, and other shared interests.[20] He also participated in Israel’s delegation to the 34th U.S.–Israel Joint Economic Development Group meeting that October.[21] The dialogue addressed foreign-investment risk management, women’s economic empowerment, quantum-information and artificial-intelligence research collaboration, public-transportation technology, and fintech investment cooperation.[21]

In September 2024, Yaron spoke with U.S. Deputy Treasury Secretary Wally Adeyemo, who urged an extension of at least one year for correspondent banking relationships between Israeli and Palestinian banks.[22] Adeyemo emphasized economic stability as a contribution to Israel’s security and the importance of countering financial flows that fund terrorist groups.[22] A November 2024 Jewish Agency board-meeting schedule also listed Yaron as the speaker for a special session on Israel’s economic situation.[23]

In November 2025, Yaron chaired the Forum of Small and Open Economies and led a discussion among central-bank governors on the macroeconomic implications of artificial intelligence at a meeting in Basel, Switzerland.[24]

Yaron’s work with Ravi Bansal on long-run risks influenced research into expected returns and risk in asset pricing, with applications to finance and macroeconomics.[4] His July 2018 academic CV listed their 2004 article among the Journal of Finance’s five most-cited papers published since 2004.[6] Alongside its Smith-Breeden and Stephen A. Ross awards, his academic recognition included an invitation from the Nobel Committee to participate in the 2013 Nobel Prize ceremonies.[4][6]

As governor, Yaron combined monetary-policy leadership with emergency measures that addressed currency-market volatility, household borrowing burdens, and financing for businesses affected by war.[17] He accepted the request to continue for a second term in 2023 while citing the important economic tasks ahead, having already indicated that he would remain at least through the wartime emergency period.[5]

Yaron’s warnings about the proposed judicial overhaul placed him in a major political and economic debate in 2023.[25] The government presented the plan as a means of curbing judicial overreach, while critics viewed it as a threat to democratic values; investors and credit-rating agencies expressed concern about institutional independence.[25] In February, Yaron defended his position that strong, independent institutions were important to economic prosperity and Israel’s sovereign credit rating.[26] In the letter accompanying the Bank’s 2022 annual report, he called for institutional changes to command broad agreement.[14]

At a July 2023 press conference, Yaron linked uncertainty over the proposed changes to excess shekel depreciation and Israeli stock-market underperformance.[27] He estimated that excess depreciation had added 1%–1.5% to inflation and warned that continuing uncertainty could impose substantial economic costs.[27] Interest-rate policy also attracted criticism from lawmakers because higher rates increased mortgage and other borrowing costs, while banks were slow to pass higher rates on to savings accounts.[5]

Yaron’s assessments of ultra-Orthodox participation in employment and military service addressed another politically sensitive policy issue.[18][28] In April 2024, he said that the Bank had estimated a possible 6%–7% loss in GDP per capita without an action plan concerning ultra-Orthodox society, emphasizing employment, education, and productivity.[18] He also argued that longer regular military service and more reserve-duty days could raise costs and reduce the available workforce.[18] In October 2024, he estimated the economic cost of not drafting ultra-Orthodox men at approximately 10 billion shekels annually, or 0.6% of GDP.[28]

Yaron also described Israel’s international reputation as “intangible capital,” warning in April 2024 that worsening sentiment could affect investors’ perceptions and economic relationships.[18] These figures and causal assessments were estimates and policy judgments advanced by Yaron, rather than independently established outcomes.[18][27][28]