The economic response of the Israeli government to a rapid influx of immigrants by the founding of the state, 1948–1953: Expansionary fiscal policy and rationing

Andrew Schein

Economic History of Developing Regions, 2024, vol. 39, issue 1, 28-48

Abstract: Israel was founded in 1948, and immediately afterwards, numerous immigrants came to the country. The Israeli government decided to provide provisions to these immigrants, along with trying to develop the country and investing in the military. This fiscal expansion was funded by seigniorage, and the government attempted to restrain inflation by imposing price controls and rationing food and other consumer goods. This policy failed to stop inflation, and there were persistent shortages of many goods in the country, except for bread which was not rationed. There were even shortages of eggs, which were all produced domestically and whose output increased on a per capita basis by more than 250% in comparison to the number of eggs produced prior to the founding of the state. This indicates that the shortages in the stores were due to the rationing. The shortages led to a flourishing black market, and a reduction in consumer welfare. The rationing made a difficult situation worse and the government began to end the rationing in 1952.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/20780389.2023.2220075 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rehdxx:v:39:y:2024:i:1:p:28-48

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rehd20

DOI: 10.1080/20780389.2023.2220075

Access Statistics for this article

Economic History of Developing Regions is currently edited by Alex Klein and Alfonso Herranz-Loncan

More articles in Economic History of Developing Regions from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().