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09-01-2019 | Symposium: Order and Disorder Around the World

An Economic and Public Policy View of Demonetization in India

Author: Feler Bose

Published in: Society | Issue 1/2019

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Abstract

The paper looks at the recent demonetization exercise that the government of India imposed on its people. The demonetization exercise was marketed from a Public Interest perspective as a way to eliminate corruption, increase the tax base and to fight terrorism. However, the Public Choice perspective brings out the political self-interest involved in the demonetization exercise. The role of foreign and domestic interest groups involved in pushing for demonetization is explored. Insights from Austrian Economics shows why top down planning fails and results in more controls. Insights from Public Policy shows that the lasting impact of demonetization is an increased interest in digital payments.

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In India the common person was impacted majorly, but in relative terms, special interests had a lot more to gain. Some like Anil Bokil suggest that the marginal suffering of the common person was small (Smith 2017a) since the common person was already suffering a lot prior to demonetization.

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Title: An Economic and Public Policy View of Demonetization in India
Author: Feler Bose
Publication date: 09-01-2019
Publisher: Springer US
Published in: Society / Issue 1/2019
Print ISSN: 0147-2011
Electronic ISSN: 1936-4725
DOI: https://doi.org/10.1007/s12115-018-00322-9

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