Pre and Post Impact of Demonetization on Economic Growth: Evidence from Countries Implemented Demonetization

Demonetization is the process by which government of any country cancel the legal tender of currency unit. Demonetization is necessary whenever there is a parallel economy run by black money. The old unit of currency must be retired and replaced with a new currency unit. This measure has been taken...

Full description

Saved in:
Bibliographic Details
Published in:Abhigyan (New Delhi) 2018-04, Vol.36 (1), p.1-10
Main Authors: Modak, Kali Charan, Kushwaha, Vivek S.
Format: Article
Language:English
Subjects:
Analysis
Corruption
Counterfeiting
Criminality
Currency
Economic growth
GDP
Government
Gross Domestic Product
Informal economy
Litigation
Monetary policy
Money
Shortages
Terrorism
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Demonetization is the process by which government of any country cancel the legal tender of currency unit. Demonetization is necessary whenever there is a parallel economy run by black money. The old unit of currency must be retired and replaced with a new currency unit. This measure has been taken by the country to address the issue of corruption, black money and counterfeit notes. Demonetization move is expected to cleanse the formal economic system and discard black money from the economy. On 8 November 2016, the Government of India announced the demonetization of all 500 and 1,000 banknotes of the Mahatma Gandhi Series on the recommendation of the Reserve Bank of India (RBI). The government claimed that the demonetization would restrict the shadow economy and crack down on the use of illegal and counterfeit cash to fund illegal activity and terrorism. The announcement of demonetization and the prolonged cash shortages created significant commotion throughout the economy, intimidating economic output. The move was seriously criticized as inadequately designed and inequitable, and was met with protests, litigation, and strikes. This paper elucidates the Pre & Post impact of demonetization on economic growth. The study covers a pre and post period of demonetization of selected countries (Australia, Ghana, Myanmar and Nigeria). The study is based on changes in Gross domestic product (GDP) of selected countries during pre and post demonetization.
ISSN:0970-2385
2583-1445
DOI:10.56401/Abhigyan_36.1.2018.1-10