Although there were elements of monetarism in his strategy, he was neither doctrinaire nor conservative. Fellow practicitioners defined his approach as "heterodox" rather than "orthodox". He took what he, and his country, needed from different schools of economics.
Bruno's strength as an economics professor who abandoned academia for the compromised world of politics was his inventiveness. He had a rare skill for marrying theory with practice, a talent for explaining his ideas to non- economists and selling them to his political masters.
The anchor of his programme was a fixed exchange rate, since many Israeli prices were linked, formally or informally, to the dollar. This was accompanied by drastic cuts in the state budget, backed by high rates of interest and a freeze on wages and prices. Real interest rose to 20-30 per cent, which Bruno later admitted was too drastic even in an emergency.
After serving as economic adviser to the Finance Mininster, Yitzhak Modai, Bruno was appointed governor of the Bank of Israel in 1986 when Labour's Shimon Peres was Prime Minister in a national-unity coalition. Although he was identified with the Labour movement, the subsequent Likud Government pressed him to stay on when his term expired in 1991. Instead, he joined the World Bank as chief economist, a post in which he continued until a few months before his death from bone cancer.
At the Bank of Israel, he was respected as an open-minded, if outspoken governor. "People felt a strong attachment to him once they knew him," a former colleague said. "He had no stomach for intrigues between departments. His decisions were always to the point. Personality didn't come into it. He read the material. He worked a lot at home. He listened very attentively."
Michael Bruno was born in Hamburg in 1932. His German Jewish family moved to Palestine a year later after Hitler rose to power. Bruno came to England to read Mathematics and Economics at Cambridge, then took a doctorate at Stanford in California.
Back in Israel, he worked at the Bank of Israel from 1957 to 1963, when he joined the Economics department of the Hebrew University of Jerusalem. He was appointed to the Carl Melchior chair of international economics in 1970 and was awarded an Israel Prize, his country's highest honour for scholastic or artistic achievement, in 1994.
After returning to Jerusalem from Washington earlier this year, knowing that his condition was incurable, Bruno threw himself bravely into the task of upgrading his old university's department of economics into a semi-independent school with new funding. He hoped he would have time to help restore some of its waning reputation.
Politically, Bruno was on the left of Israeli politics, defined in terms of attitude towards the Arab neighbours, rather than the ownership of the means of production, distribution and exchange. He was among the founders of the Peace Now movement in 1978 and was active in both its demonstrations and its inner counsels. In advance of the 1981 general election, Bruno persuaded the Labour Party to write into its platform that it did not want Israel to go on ruling another people.
He inherited the German Jew's love of music and the arts, attending concerts until shortly before his death. He was married twice, and is survived by both wives and by two sons and a daughter from his first marriage.
On three occasions in 1955-56, writes Tam Dalyell, Michael Bruno came to Scotland to stay in my home during the Christmas and Easter vacations, when returning to Israel was too difficult and expensive. At that time, he was an engineer-turned-economist graduate, who had been sent to King's College, Cambridge on the recommendation of Don Patinkin, Professor of Economics at the Hebrew University.
We had the privilege of being supervised together by Harry Johnson, Nicky Kaldor, Robin Marris and Joan Robinson. Bruno's particular interests were trade cycle theory, as outlined by Roy Harrod and Michael Kaletsky, and underdevelopment, especially the work of Professor Ragnar Nurkse - both subjects of great importance to Israel at that time.
Bruno was a workaholic by nature, which trait was reinforced by a tremendous sense of obligation to his fellow countrymen in Israel, who had made his further education possible. He once summed it up: "You cannot quite understand, here in Britain, when I tell you that I have to work to contribute to the very survival of my country." He was also a real believer in manual work. Once when he was staying in Scotland a cattle grid was needed; he instantly offered to build it, and did, with me as his labourer.
At Christmas 1956, I was invited to stay with his parents at their home in Haifa. Michael was away, as he often was, doing part of his military service in the Negev. Dr Bruno, his father, told me of the circumstances which he believed had contributed to the formation of his son's outlook on the world. A grateful patient in his medical practice in Hamburg had summoned him to his house late at night on the pretext of an emergency call on behalf of his infant daughter. "When I arrived, he said it was not Greta who was ill, let alone in danger - `It is you and your family. I have Nazi connections, but am grateful to you - get out of Hamburg tomorrow!' " Mercifully, as Michael Bruno said later: "We took the hint and survived - many of my parents' friends did not and were to perish in the Holocaust."
Having scrambled to Palestine, Dr Bruno confirmed that the apocryphal story of new builders passing bricks to one another, "danke, Herr Lehrer", "danke, Herr Zahnarzt", "danke, Herr Professor", was literally true in his case. He had built houses when he first arrived.
Michael Bruno's childhood was spent partly at the Kibbutz of Guivat Brenner. His younger brother, Danny Bruno, a tough Kibbutznik, took me to the Nahal Kibbutz at Revivim in the Negev Desert. This had been one of the more inhospitable spots on the face of the planet. Michael Bruno joined us. Morale was extremely high. The place exuded comradeship. Ashkenazi (German- born) Brunos and Sabra (from the word for prickly pear, used to describe Kibbutz-born) Israelis got on famously: "There is nothing like coping with adversity for creating real contentment."
When my wife Kathleen and I in 1991 spent an evening at Michael Bruno's home, when he had become an extremely influential central banker nationally and internationally, he was still the same person; "coping with adversity" was what Michael Bruno's life was all about.
Michael Bruno, economist: born Hamburg 30 July 1932; married 1958 Ofra Hanoch (nee Hirshen-berg, marriage dissolved; two sons, one daughter), Netta Ben-Porat; died Jerusalem 25 December 1996.