that is much more difficult than it sounds. not least because there is a marked difference between the complex problems of real life and the exercises we get presented with in text books. thirdly, maths helps develop decision - making skills, i. e. the capacity and competence to weigh up options and trade - offs between alternatives and, in the face of them, to make the best decision you can, at the time that you have to, with the information that you have. finally, it helps develop the visualisation skills that allow us to imagine how things work – or could work – by looking at drawings, sketches or schematics. these integrative and holistic thinking skills are the ones that, at precisely the time we need them the most, are in chronically short supply. not least because, in a world irrevocably changed by technology, we all too often fall into the trap of confusing instant access to almost infinite information with knowledge itself. clearly, information and knowledge are very different. just as real education is very different from much of the education that gets offered up. real education is not the rote learning of facts that many of us were subjected to. instead, it is the development of all our latent abilities. similarly, real education concerns itself less with teaching us what to think and more with teaching us how to think. with these kinds of pressures facing all of us, the reserve bank is as subject as any other institution to the pressure to find positive ways to contribute and meaningfully enhance the capacity of our country. as part of our assessing our impact on stakeholders, the bank recently concluded an extensive corporate reputation study. it was the first of its kind that we had undertaken and helped us to understand how we are perceived by our stakeholders, what the key drivers of our overall reputation are and what critical improvement areas and areas of strength we should address or leverage to further build our reputation. with the baseline now in place, we will be able to measure our progress as we proceed. the results of the survey were overwhelmingly positive, with the bank considered highly respected and credible. it was clear that our stakeholders trust and respect us. however, their feedback also made the important point that the excellence that they see in us also imposes additional obligations on us. specifically, stakeholders want and need us to engage even further with those parts of our society that are facing the most challenges, specifically education and the development of our youth. this feedback was very much in line

itself is lower than it was in 2003, although the cyclically adjusted deficit is close to 4 percent – higher than it was in 2003. since 2007, when the actual deficit was almost zero, the deficit has grown during the crisis, declined somewhat in 2010, and since then has not declined. the result is that we have a deficit of about 4 percent in a situation of almost full employment. i feel very uneasy with this kind of deficit in the current situation, since if the economy enters a recession – a scenario which we must take into account – the deficit will grow, and it will be harder to deal with it. the debt - to - gdp ratio declined from a level of almost 300 percent of gdp prior to the stabilization plan, climbed slightly to a level of about 100 percent during the recession at the beginning of the 2000s, and continued to decline since then to a level of 74 percent today. compared to other countries, we have greatly improved in this parameter due to an increase in the debt levels of many countries as a result of the crisis, but it is very important for the state of israel that the debt to gdp ratio be low. we are exposed much more than other countries to geopolitical risks, and if god forbid we find ourselves one day in a conflict with our neighbors, near or far, it is important that we not come into it with this kind of debt ratio. it is very important, therefore, to continue reducing the debt to gdp ratio. in 2012, the government adjusted the deficit path such that the deficit targets would be reduced more slowly than planned beforehand. in practice, if we grow at an average rate of bis central bankers ’ speeches 3. 75 percent per year, the deficit will decline even more slowly than the path decided upon by the government, based on the existing tax rates in the existing legislation – that is, even taking into account the increase in the vat and direct tax rates recently enacted. according to this estimation by the bank of israel, the deficit in the coming year will apparently be 3. 5 percent, and will reach a level of 2 percent only in the year 2020. according to this projection, debt will also decline more slowly than the government estimated when setting the legislation. the fiscal rule which guides our actions is the result of a joint effort by the ministry of finance, the prime minister ’ s office, and the bank of israel. it is a relatively simple rule that can be easily explained to the public. we know that the expenses