Munich Personal RePEc Archive

Demonetisation: Some Theoretical Perspectives

Waknis, Parag (2017): Demonetisation: Some Theoretical Perspectives.

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Abstract

On November 8, 2017, the Prime Minister of India Narendra Modi declared currency denominations of Rs.500 and Rs.1000 to be illegal for use in transactions. These currency denominations together constituted almost 85% of total currency in circulation according to some estimates. Based on essentiality of money, and a segmented markets model perspective, I analyze the effects of this surprise demonetisation policy on the Indian economy.

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