"It is difficult to determine the opportunity cost of the conflict. How well might the Israeli economy have done if the conflict hadn't taken place?"
John Kerry is back in Israel, to push for progress on Israeli-Palestinian peace talks. The American government has revealed little about what Kerry has said, but if his past comments are any indication, he may discuss the importance of peace to the Palestinian economy. He's less likely to talk about the importance of peace to the Israeli economy.
Israel's G.D.P. per capita was more than thirty-three thousand dollars in 2011, and the country attracted more than ten billion dollars in foreign direct investment last year. The Bank of Israel is flush with reserves, almost eighty billion dollars, with which it can stabilize the shekel. Newly discovered gas fields are estimated to be worth billions of dollars. Last year, Israeli companies exported about sixty-two billion dollars' worth of goods. And Israeli entrepreneurship is justly famous: in June, Google announced it had bought the Israeli mapping startup Waze, reportedly for a billion dollars.