Israeli Economist Develops Calculator for Sanctions Impact

An Israeli economist has developed an online calculator to help individuals estimate the financial impact of potential economic sanctions on their households. Dr. Peleg Samuels, a lecturer at Tel Aviv University's economics faculty, created the tool based on economic damage assessments from countries like Russia and Iran that have faced international sanctions. He shared the calculator with Ynet, stating that it allows users to "independently calculate the damage from the program of transitioning to cryptocurrencies," a possibility recently announced by Prime Minister Benjamin Netanyahu.

The calculator models three scenarios for two hypothetical Israeli families: the "Cohen family" with a monthly income of 25,000 shekels and a mortgage balance of 1 million shekels, and the "Levy family" with a higher income of 35,000 shekels and a mortgage balance of 2.5 million shekels.

In the first scenario, "limited, targeted sanctions" such as the US ending aid to Israel and the EU canceling trade preferences, could cost families between 250 to 700 shekels monthly, primarily through tax increases. The second scenario, involving US sanctions on banks and the financial system, would be more severe. The Cohen family could lose 2,200 to 6,300 shekels per month, while the Levy family could lose 5,200 to 12,000 shekels. This scenario also projects a 33% increase in unemployment risk, particularly in the high-tech industry, and a potential loss of up to 160,000 shekels in pension savings due to falling stock values and frozen foreign investments.

The third scenario, "large-scale trade sanctions," could result in monthly losses of up to 8,600 shekels for the Cohen family and 6,600 to 16,000 shekels for the Levy family. All scenarios consider potential actions by the Bank of Israel to protect the shekel, such as tightening capital controls or releasing foreign reserves, which could lead to increased mortgage payments. For the Cohen family, this could mean a 7,000 shekel increase in monthly mortgage payments, and for the Levy family, 17,000 shekels.

Dr. Samuels emphasized that the calculator is a simulation based on economic research and international experience, intended not to frighten citizens but to highlight the importance of avoiding sanctions, especially those targeting the banking system, which he described as potentially "truly destructive."