Michael Bruno (economist)

For Company, see Michael-Bruno.

Michael Bruno
Born	(1932-07-30)30 July 1932 Hamburg, Germany
Died	25 December 1996(1996-12-25) (aged 64) Jerusalem, Israel
Nationality	Israel
Academic career
Field	Macroeconomics
Alma mater	Stanford University King's College, Cambridge Hebrew University of Jerusalem
Doctoral advisor	Kenneth J. Arrow
Influences	Don Patinkin

Michael Peter Bruno (Hebrew: מיכאל ברונו) (born 30 July 1932; died 25 December 1996) was an Israeli economist. He was a governor of Israel's central bank and a former World Bank Chief Economist.

Biography

Michael Peter Bruno was born 30 July 1932 in Hamburg, Germany. His German-Jewish family emigrated to Mandate Palestine the following year upon Hitler's rise to power, and settled in the northern town of Haifa. His father Hans was a doctor, and his mother Lotte, a pianist. Bruno inherited his father's dedication to the sciences, his mother's love of music, and their joint passion for nature and travel. His parents brought their European and cosmopolitan sensibilities with them to Palestine, wishing to some degree to preserve a certain way of life, but the family's early years were faced with difficulties. Palestine was awash with doctors (mostly recent immigrants too) and for several years Hans Bruno earned a living as a car mechanic. When World War II broke, Hans Bruno found that his skills would be better put to use in North Africa, and he joined the British Army and served as a medical officer in Alexandria, Egypt.

During the later struggle for independence from the British Mandate, the family was expelled from their home and relocated to a more hostile part of town, and Michael Bruno had to be taken to school in an armoured school vehicle. Some of these difficulties soon lessened following the declaration of independence of the state of Israel.

After the completion of his military service In 1952, Bruno began studying Mathematics and Physics at the Hebrew University of Jerusalem, and in 1954, on the recommendation of Don Patinkin, Professor of Economics at the Hebrew University of Jerusalem, Bruno came to England to read Mathematics and Economics at King's College, Cambridge, after which he travelled to California to complete a doctorate at Stanford University. He completed his thesis in 1963, titled Interdependence, resource use, and structural change in Israel.

Bruno's doctoral supervisor, Nobel laureate Kenneth J. Arrow wrote in 1997:

"(Michael's) sharp mind, ability to ask the right questions of the data and the policy context, balanced judgement, and lack of arrogance made him a natural leader. In addition to the governmental and operating positions he was entrusted with, he earned the great respect of his fellow economists, who chose him as president of their societies: The Israel Economic Association, the Econometric Society, and the International Economic Association".

Upon returning to Israel, he worked as director of research at the Bank of Israel from 1957 to 1963, when he joined the Economics department of the Hebrew University of Jerusalem which remained his academic home until his death.

He is well remembered as the economist who pioneered the 1985 stabilisation plan, which succeeded in bringing Israel's annual rate of inflation down from 450% and rising to under 20% in the course of two years.

In 1986, after serving as senior policy adviser to the Finance Minister, Bruno was appointed governor of the Bank of Israel when Labour's Shimon Peres was Prime Minister in a national-unity coalition. In the same year, Bruno was concurrently appointed president of the Econometric Society.

Although he was identified with the left-leaning Labour movement, the subsequent Likud Government pressed him to stay on when his term expired in 1991. Bruno rejected this offer and instead joined the World Bank as Vice-President and Chief Economist, a post he held until a few months before his death from cancer. Michael Bruno was also Visiting Professor at MIT, Harvard University, the University of Stockholm and the London School of Economics. The Michael Bruno Memorial Award, initiated in 1999 by the Rothschild Foundation, is a highly prestigious and lucrative science prize.

Eric Silver and Tam Dalyell, write in their Michael Bruno obituary (The Independent, 28 December 1996):

"Bruno's strength as an economics professor who abandoned academia for the compromised world of politics was his inventiveness. He had a rare skill for marrying theory with practice, a talent for explaining his ideas to non- economists and selling them to his political masters."

Peter Passell wrote in his obituary to Bruno (New York Times, 31 December 1996):

"Mr. Bruno is largely remembered as a hands-on development economist. In 1975 he served on a government committee that revamped the Israeli tax system with an eye toward making it friendlier to private enterprise. And in 1976 he became the senior policy adviser to the Finance Minister, who was struggling with the increasing serious economic liabilities of maintaining Israel in a permanent war footing. And as governor of the Bank of Israel from 1986 to 1991, he spent much of his political capital defending the anti-inflation program. "Stabilization often works for a few months," explained Stanley Fischer, the first deputy managing director of the International Monetary Fund; "Michael cemented its enduring success in Israel."

Mr. Bruno's program to battle inflation was built around the rapid elimination of the inflationary expectations that haunt many less developed countries and often require years of economic austerity to exorcise. The program was widely imitated in Latin America and also helped to inspire the "shock therapy" later applied to transition economies in eastern Europe, notably Poland and the Czech Republic.

His less well-known, but equally important accomplishment in the eyes of many Israelis, was the design of a successful plan for integrating hundreds of thousands of Soviet Jews into the Israeli economy. Rather than dictate where they would live and how they would earn a living, Mr. Bruno argued that free markets could manage the process if the immigrants were given cash for the transition and Israel's national labour union relaxed its control of job creation. In 1991 he moved to Washington to become chief economist with the World Bank, where he became an important figure in refocusing the bank's mission. With his encouragement, the World Bank has accented its role as a clearinghouse for research while retreating from the routine of funnelling capital into economies that can attract private investors.

Tam Dalyell adds:

Politically, Bruno was on the left of Israeli politics, defined in terms of attitude towards the Arab neighbours, rather than the ownership of the means of production, distribution and exchange. He was among the founders of the Peace Now movement in 1978 and was active in both its demonstrations and its inner counsels. In advance of the 1981 general election, Bruno persuaded the Labour Party to write into its platform that it did not want Israel to go on ruling another people.

Bruno was a workaholic by nature, which trait was reinforced by a tremendous sense of obligation to his fellow countrymen in Israel, who had made his further education possible. He once summed it up: "You cannot quite understand, here in Britain, when I tell you that I have to work to contribute to the very survival of my country." He was also a real believer in manual work. Once when he was staying in Scotland a cattle grid was needed; he instantly offered to build it, and did, with me as his labourer.

At Christmas 1956, I was invited to stay with his parents at their home in Haifa. Michael was away, as he often was, doing part of his military service in the Negev. Dr Bruno, his father, told me of the circumstances which he believed had contributed to the formation of his son's outlook on the world. A grateful patient in his medical practice in Hamburg had summoned him to his house late at night on the pretext of an emergency call on behalf of his infant daughter. "When I arrived, he said it was not Greta who was ill, let alone in danger – "It is you and your family. I have Nazi connections, but am grateful to you – get out of Hamburg tomorrow!". Mercifully, as Michael Bruno said later: "We took the hint and survived – many of my parents' friends did not and were to perish in the Holocaust."

Bruno is survived by his second wife Netta (née Ben-Porath), and 3 children – daughter Yael and sons Ido and Asa – from his first marriage to Ofra Hanoch (née Hirshenberg).

Bruno died of cancer 25 December 1996, at home in Jerusalem.

Awards and honours

• In 1970, Bruno was appointed the Carl Melchior chair of international economics.
• In 1974, he was awarded the Rothschild Prize for Social Science.
• In 1994, he was awarded the Israel Prize, for economics.

Publications

• Di Tella, Guido; Dornbusch, Rüdiger (1988), Inflation Stabilization: The Experience of Israel, Argentina, Brazil, Bolivia, and Mexico, Cambridge: MIT Press, ISBN 0-262-02279-6 {{citation}}: Missing |author1= (help)
• Crisis, Stabilization, and Economic Reform: Therapy by Consensus, New York: Oxford University Press, 1999, ISBN 0-19-828663-5
• Sachs, Jeffrey (2002), Economics of Worldwide Stagflation, Cambridge: Harvard University Press, ISBN 0-674-23475-8 {{citation}}: Missing |author1= (help)

Further reading

• Passell, Peter (December 31, 1996), "Michael Bruno, 64, Economist And Israel's Banking Chief", New York Times
• Silver, Eric; Dalyell, Tam (December 28, 1996), "Obituary: Michael Bruno", The Independent
• Daniel Maman and Zeev Rosenhek. 2011. The Israeli Central Bank: Political Economy, Global Logics and Local Actors, Routledge.

External links

• Israel Bank
• Econometric Society
• Falk Institute
• World Bank

See also

• List of Israel Prize recipients