Zvi Hercowitz

Zvi Hercowitz (Hebrew: צבי הרקוביץ‎‎) is an Israeli economist and economics professor. He was born in Rosario, Argentina, on December 21, 1945, and he emigrated to Israel in December 1965. In October 1969, after serving in the army, he began his studies at the Hebrew University in Jerusalem, where he received his B.A. in Economics in February 1973 and his M.A. in Economics in July 1975.

Hercowitz then enrolled at the University of Rochester. His areas of specialization were Macro and Monetary Economics and International Economics. In 1980, he completed his Ph.D. dissertation, "Money and the Dispersion of Relative Prices", under the supervision of Robert Barro.

Hercowitz joined Tel Aviv University in 1980, where he remains today. He also serves as an advisor to the Bank of Israel. He has been a visiting professor at Carnegie Mellon University, the University of Michigan, the University of Rochester, and the University of Western Ontario.

Hercowitz is best known for the idea of investment specific technological change, formulating the zero-income effect utility function for labor, and introducing both capacity utilization and household production theory into macroeconomics.

1. "Money and the Dispersion of Relative Prices", Journal of Political Economy, April 1981. Variability over time in aggregate indices of price level, such as the CPI, is often associated with a greater dispersion in relative prices at a point in time. To model this phenomenon, Zvi Hercowitz uses a variant of the celebrated Lucas-Barro island model. In a world where people have incomplete information, individuals are confronted with the problem of determining whether price changes in specific goods are caused by general price inflation or by shifts in the supply and demand for this good. In the Lucas-Barro island model perfectly perceived money growth should not affect relative prices. Money growth has to be unperceived to have real effects. Using data from the German hyperinflation, an equation that relates price change dispersion to exogenous unperceived money shocks is estimated. Zvi finds that unperceived money growth does affect price dispersion, as the model predicts, while perceived money has no effect. This paper derives from Zvi's thesis at the University of Rochester.

...
Wikipedia