To browse Academia. Skip to main content. Log In Sign Up. Papers People. This paper seeks to analyze the immediate impact of demonization drive on digital financial inclusion in India which was declared on 8th November
Educational Research Multimedia & Publications,India
We analyze a unique episode in the history of monetary economics, the Indian "demonetization. We present a model of demonetization where agents hold cash both to satisfy a cash-in-advance constraint and for tax evasion purposes. Districts experiencing more severe demonetization had relative reductions in economic activity, faster adoption of alternative payment technologies, and lower bank credit growth. The cross-sectional responses cumulate to a contraction in employment and nightlights-based output due to demonetization of 2 p. These cumulated effects provide a lower bound for the aggregate effects of demonetization. Our analysis rejects money non-neutrality using a large scale natural experiment, something that is yet rare in the vast literature on the effects of monetary policy. We thank Fernando Alvarez discussant , Pol Antras editor , Vimal Balasubramaniam discussant , Robert Barro editor , Bent Sorenson discussant , four anonymous referees, and numerous seminar participants for their comments.
Impact of Demonetization on Indian Economy
Abstract — Demonetization refers to withdrawal of a particular form of currency from circulation. It is necessary whenever there is a change of national currency; the old currency must be remove and substituted with the new currency unit. The currency was demonetizing first time in , and second time in On 8th Nov. The chaos was created in every strata of the society whether upper, middle or lower.
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