Economist Develops Calculator to Assess Household Impact of Potential Sanctions
Tel Aviv University economist Dr. Peleg Samuels has developed a calculator estimating the financial toll of international sanctions on Israeli households, projecting monthly losses up to 16,000 NIS under severe trade and banking embargo scenarios.
Dr. Peleg Samuels, a lecturer at the Tel Aviv University School of Economics, has developed a specialized calculator designed to estimate the potential financial impact of broad international sanctions on an average Israeli household. Based on economic data from sanctioned nations such as Iran and Russia, the model simulates various scenarios ranging from limited trade restrictions to severe banking embargoes. According to the calculations, a limited sanctions scenario—characterized by the cessation of American aid and the withdrawal of European trade benefits—would cost an average household between 250 and 700 NIS per month, primarily driven by higher domestic taxes compensating for lost foreign assistance.
Scenarios and Household Impact
The simulation evaluates distinct family profiles, illustrating how sector-specific vulnerabilities alter the outcome. For instance, a middle-income household with a combined monthly gross income of 25,000 NIS and a 1 million NIS mortgage would face drastically different burdens compared to a dual-income tech sector family earning 35,000 NIS with a 2.5 million NIS mortgage. Under a severe banking sanctions scenario, where international payment systems are restricted and the United States joins the embargo, the first family's monthly losses could range from 2,200 to 6,300 NIS, while the tech sector family could lose between 5,200 and 12,100 NIS per month.
Furthermore, the model addresses broader macroeconomic ramifications, including potential capital controls by the Bank of Israel to stabilize the shekel. While preventing currency devaluation, such monetary defense measures would elevate interest rates, adding a one-off mortgage cost of approximately 7,000 NIS for the first household and up to 17,000 NIS for the second. Dr. Samuels emphasized that the simulation is not a predictive forecast intended to induce panic, but rather an analytical illustration meant to underscore the critical economic necessity of avoiding severe international diplomatic and financial confrontations.
