Business: Indexation Gone Rampant

The Central Bureau of Statistics in Jerusalem announced last week what for Israelis is the most vital news of the month: the inflation rate. In June it slowed to 4.6%, or an annual cost of living increase of 76%, vs. last month's 133%.

As soon as the inflation figure was announced, Israelis pulled out pocket calculators and began computing the value of their bank accounts, and merchants began adjusting prices. Banks, retirement funds and other financial institutions are automatically required to adjust the value of savings accounts, pensions and life insurance policies to...

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