Karnit Flug was born in Poland, in 1955. Her family immigrated to Israel when she was 3 years old. She graduated from the Hebrew University of Jerusalem with a bachelor‘s and master's degrees in Economics and received a Ph.D in economics at Columbia University.
Flug joined the Bank of Israel in 1988 in the Research Department, publishing papers on topics including macroeconomics, the labor market and social policies. In 2013 she became the first female Governor of the Bank of Israel.