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

New Delhi’s Indo-Pacific strategy enters a new phase

India appears to be investing fresh dynamism in its Indo-Pacific strategy. At the time when the US, under president Donald Trump, has adopted a conciliatory approach towards China and has changed the name of America’s Indo-Pacific Command to just Pacific Command, India has quietly moved towards con

CAG flags major fiscal lapses in Maharashtra

Maharashtra`s fiscal management has come under sharp scrutiny after the Comptroller and Auditor General (CAG) of India, in its State Finances Audit Report for 2024-25, flagged significant budgetary inefficiencies, accounting irregularities, understatement of key fiscal indicators and widespread governanc

The health sector research we are not doing

Some neglect is loud. This kind is quiet. It sits in research never commissioned, data never collected, questions never asked. In South Asia, that quiet has let the region’s worst health problems stay understudied, underfunded, and out of sight of those who could act.

Study flags accessibility and last-mile challenges on Mumbai Metro Aqua Line

Mumbai Metro Line 3 (Aqua Line), the city`s first fully underground metro corridor and one of its largest public transport investments, represents a major engineering achievement and has been widely welcomed by commuters. However, the overall commuter experience continues to be constrained by accessibili

Centre intensifies preparedness as El Niño threat looms

Amid uncertainty in the southwest monsoon due to the potential impact of El Niño, the government is addressing the situation with comprehensive preparedness, a clear strategy, and strong ground-level action. While challenges remain, the entire system has been activated in advance and is working proa

India is crossing a climate threshold

On June 28, Delhi recorded a maximum temperature of 41.3°C, four degrees above the seasonal normal. But the “feels like” temperature, which factors in humidity, showed more than 51°C. What the body experienced was very different from what the thermometer recorded. India`