An examination of the factors that led to the economy's transition from recession to growth in 2003 has revealed that exogenous factors are responsible for two thirds of the growth rate, while endogenous factors such as the decrease in the tax-rate and improved macroeconomic policies - reforms attributed to Benjamin Netanyahu's tenure as Finance Minister - are the cause of the remaining third.

"International trade, immigration and improved security are the most significant factors in creating sustained growth within the Israeli economy," said Dr. Karnit Flug and Dr. Mishel Stravinsky of the Bank of Israel's research department.

Sustained growth is defined as a period in which average annual per capita growth exceeds 3 percent over a period of at least four years.

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The research also found that factors that increase economic demand and factors that increase economic supply both contribute to creating periods of sustained growth.

International trade, the rate of U.S. production, and security conditions are some of the main variables that lead to an increase in demand in Israel.