Israel must fight inflation by holding wages to their present levels and letting prices rise, Aharon Barth, general director of the Bank Leumi L’ Israel, the national bank of Israel, declared today. Thus, Mr. Barth asserted, consumption would decrease and the living standard would drop.
This is the only answer to inflation at a time when immigrant costs and defense requirements are mounting, Mr. Barth said. He proposed, specifically, that wages be freed from the cost of living bonus which goes into effect automatically as prices go up.
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