The Department of Economics was established in 1949, with the arrival of Don Patinkin from Chicago. Don Patinkin quickly gained international recognition with his book Money, Interest, and Prices (1965), which presented a synthesis of monetary and value theory and became one of the field's classic texts. Patinkin soon built a strong and diversified department, whose graduates formed the backbone of academic economists in Israel’s civil service (known as "Patinkin Boys"), the business community, as well as in Israel’s academia.
Together with Simon Kuznets and other leading economists, Patinkin co-founded the Maurice Falk Institute for Economic Research in Israel, which, in collaboration with the department, conducted foundational research on the Israeli economy. To this day, the Falk Institute remains focused on empirical studies of Israel's current economic issues. In 1991, the Center for the Study of Rationality was established under the leadership of Professors Robert Aumann and Sergiu Hart. The center serves as a hub for department researchers working in economic theory and interdisciplinary studies that connect economics with other fields of knowledge, alongside mathematicians, computer scientists, psychologists, statisticians, philosophers and other scholars.
Over the years, the department has fostered a tradition of both theoretical and empirical research, as well as involvement in shaping economic policy, following the path set out by Don Patinkin.
Many members of the department have received prestigious awards, including:
The Nobel Prize in Economics: Robert Aumann (2005) and Joshua Angrist (2021).
The Israel Prize in Social Sciences: Dan Patinkin (1970).
The Israel Prize in Economics: Menachem Yaari (1987), Michael Bruno and Robert Aumann (1994), Nissan Liviatan (2007), and Sergiu Hart (2018).
EMET Prize in Economics: Awarded to Robert Aumann (2002), and Menachem Yaari (2012).