Demonetisation not meant to change cash use by people: Harvard economist -Governance Now

Demonetisation not meant to change cash use by people: Harvard economist

There is a need to keep some form of physical currencies in circulation, indefinitely, said Harvard economist Kenneth Rogoff

Pratap Vikram Singh | July 22, 2017 | New Delhi

#The Curse of Cash #Kenneth Rogoff #Harvard #Demonetisation #Delhi Economics Conclave

Here are 10 things that Kenneth Rogoff, Thomas D Cabot professor of public policy, department of economics, Harvard University, and author of 'The Curse of Cash', said about demonetisation at the Delhi Economics Conclave 2017:

1. The core idea for demonetisation is to make it difficult for people to do large transactions in cash but not to dramatically change how cash is used by ordinary people.

2. He argues that there is a need to keep some form of physical currencies in circulation, indefinitely.

3. In legal economy cash less society is more about the carrot than stick.

4. It is important to be able to retain cash for privacy. The question, however, is the scale (of retaining cash).

5. The Indian demonetisation might yield long run benefits, but it also shows things to avoid. Reports show that it had short term negative impact on the macro-economy.

6. In the book, the argument for demonetisation was for advanced economies, not for developing economies.

7. The book proposed a gradual pause out of higher currency notes or bills — five to seven years. India did it overnight.

8. India replaced high currency notes with even higher currency.

9. Moreover, it didn't have the new bills ready when it went for sudden demonetisation.

10. The advanced economies have a very high tech system to replenish currency. Even they take six months to be year to print a new supply.

Read: Currency change: “Long-run gains depend on implementation”

Comments

Other News

An ode to the cradle of humankind

The Alphabets of Africa: Poems By Abhay K. Vintage Classics, 280 pages, ₹499.00 Abhay K

Ahmedabad district railway network to be expanded

The Cabinet Committee on Economic Affairs, chaired by prime minister Narendra Modi, on Wednesday approved the Ahmedabad (Sarkhej) – Dholera Semi High-Speed Double Line project of Ministry of Railways with total cost of Rs. 20,667 crore (approx.). It will be Indian Railways 1st semi high-speed project

Indian Ocean more contested than ever: Western Naval Command Chief

The Indian Ocean is becoming increasingly contested and strategically significant as the Indo-Pacific emerges as the defining geopolitical theatre of the 21st century, Vice Admiral Krishna Swaminathan, Flag Officer Commanding-in-Chief of the Western Naval Command, has said. Spe

Why the judiciary needs much more than four more judges

India has a particular form of governance theatre: the bold declaration that appears to be action but is actually a way of avoiding action. The Union Cabinet on May 5 approved a Bill to increase the sanctioned strength of the Supreme Court from 34 to 38. The decision has been touted as a step toward judici

Wisdom stories that don’t preach but encourage reflection

The Foundation Of A Fulfilling Life: Lessons from Indian Scriptures Deepam Chatterjee Aleph Books, 264 pages, Rs 899

Citizens of the Bay: Why BIMSTEC matters now

The international order is drifting into a dangerous grey zone as the very powers that built today`s multilateral system begin to chip away at it. The United States has increasingly walked away from global rules and forums when they no longer suit its interests, while China has rushed to fill the vacuum on