Rabbinic Responses to Rapid Inflation in Israel, 1973-1985

The economy of Israel underwent a major change during the late twentieth century in terms of rapid inflation. This article considers that from 1971 to 1972, the annual rate of inflation increased by only one percentage point, from 12% to 13%. But, from 1973 to 1978, the rate jumped to 39%. Inflation skyrocketed to 445% in 1984, before the economy was finally stabilized in 1985. Rapid inflation was accompanied by an expansion of dollarization and indexation arrangements. This article explores the legal opinions of leading rabbis on monetary issues, during and immediately after the inflationary episode of 1973 to 1985. Some essential Talmudic cases and concepts are explained for the understanding of the inflation. This article also traces the economic changes and developments that came over in Israel during the decade especially in case of inflation rates. A detailed analysis of a Rabbinical views on indexation follows with special reference to CPI which concludes the article.