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Inflation and Accumulation. The Case of Israel

Author

Listed:
  • Nitzan, Jonathan
  • Bichler, Shimshon
Abstract
The paper offers a new theoretical framework for linking inflation and accumulation, with the Israeli experience as a case study. The focal point is the process of differential accumulation by the largest core firms. The theory of differential accumulation suggests that the relative power of these firms can be augmented either through ‘breadth’ (relative employment) or ‘depth’ (relative profit per employee). In the Israeli case, inflation accelerated since the 1970s when the large core firm began shifting their emphasis from breadth to depth. The paper examines the political economic conditions typical to each of these regimes, why these conditions changed in Israel, and how the distributive gains of the core firms pushed the country onto the brink of hyperinflation. It then articulates the inherent limits of a ‘depth’ regime, why Israel reached those limits during the early 1980s, and how this brought the inflation spiral to an end.

Suggested Citation

  • Nitzan, Jonathan & Bichler, Shimshon, 2000. "Inflation and Accumulation. The Case of Israel," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 64(3), pages 274-309.
    • Handle: RePEc:zbw:espost:157770
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    File URL: https://www.econstor.eu/bitstream/10419/157770/1/bna-002_000900NB_Inflation_and_accumulation.pdf
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    References listed on IDEAS

    as
    1. Razin, Assaf & Sadka, Efraim, 1993. "The Economy of Modern Israel," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226705897, December.
    2. Shimshon Bichler & Jonathan Nitzan, 1996. "Military Spending and Differential Accumulation: A New Approach to the Political Economy of Armament — The Case of Israel," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(1), pages 51-95, March.
    3. Nitzan, Jonathan, 1992. "Inflation As Restructuring. A Theoretical and Empirical Account of the U.S. Experience," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 157989, September.
    4. Paul A. Samuelson, 1962. "Parable and Realism in Capital Theory: The Surrogate Production Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(3), pages 193-206.
    5. Rowley, Robin & Bichler, Shimshon & Nitzan, Jonathan, 1988. "Some Aspects of Aggregate Concentration in the Israeli Economy, 1964-1986," MPRA Paper 5395, University Library of Munich, Germany.
    6. Veblen, Thorstein, 1904. "Theory of Business Enterprise," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1904.
    7. Bichler, Shimshon & Nitzan, Jonathan, 1996. "Military Spending and Differential Accumulation: A New Approach to the Political Economy of Armament – The Case of Israel," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 28(1), pages 51-95.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Bichler, Shimshon & Nitzan, Jonathan, 2023. "The Capital As Power Approach. An Invited-then-Rejected Interview with Shimshon Bichler and Jonathan Nitzan," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 2(2), pages 96-174.
    2. Jonathan Nitzan & Shimshon Bichler, 2001. "Going global: differential accumulation and the great U-turn in South Africa and Israel," Review of Radical Political Economics, Union for Radical Political Economics, vol. 33(1), pages 21-55, March.
    3. Syed Ozair Ali, 2012. "Power, Profits and Inflation: A Study of Inflation and Influence in Pakistan," Working Papers id:4693, eSocialSciences.
    4. Syed Ozair Ali, 2011. "Power, Profits and Inflation: A Study of Inflation and Influence in Pakistan," SBP Working Paper Series 43, State Bank of Pakistan, Research Department.
    5. Nitzan, Jonathan & Bichler, Shimshon, 2018. "Arms and Oil in the Middle East: A Biography of Research," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 30(3), pages 418-440.
    6. Bichler, Shimshon & Nitzan, Jonathan, 2015. "Still About Oil?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 70, pages 49-79.
    7. Sébastien Charles & Jonathan Marie, 2021. "How Israel avoided hyperinflation. The success of its 1985 stabilization plan in the light of post-Keynesian theory," Review of International Political Economy, Taylor & Francis Journals, vol. 28(3), pages 528-558, May.
    8. Ali, Syed Ozair, 2011. "Power, Profit and Inflation: A Study of Inflation and Influence in Pakistan," EconStor Preprints 157853, ZBW - Leibniz Information Centre for Economics.
    9. Muhammad Akmal, 2011. "Inflation and Relative Price Variability," SBP Research Bulletin, State Bank of Pakistan, Research Department, vol. 7, pages 1-9.

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