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Short-term effects of India’s demonetization on the rural poor

Author

Listed:
  • Zhu, Heng
  • Gupta, Anubhab
  • Majumder, Binoy
  • Steinbach, Sandro

Abstract

This paper analyzes the short-run responses of poor rural households to India’s demonetization in 2016. We estimate an economic loss of 15.5% over the two months post demonetization and discuss a range of strategies that the households adopted to exchange their banned currency-denominations.

Suggested Citation

  • Zhu, Heng & Gupta, Anubhab & Majumder, Binoy & Steinbach, Sandro, 2018. "Short-term effects of India’s demonetization on the rural poor," Economics Letters, Elsevier, vol. 170(C), pages 117-121.
    • Handle: RePEc:eee:ecolet:v:170:y:2018:i:c:p:117-121
    DOI: 10.1016/j.econlet.2018.05.035
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    References listed on IDEAS

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    1. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
    2. Alem, Yonas & Söderbom, Måns, 2012. "Household-Level Consumption in Urban Ethiopia: The Effects of a Large Food Price Shock," World Development, Elsevier, vol. 40(1), pages 146-162.
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    Cited by:

    1. Fouillet, Cyril & Guérin, Isabelle & Servet, Jean-Michel, 2021. "Demonetization and digitalization: The Indian government's hidden agenda," Telecommunications Policy, Elsevier, vol. 45(2).
    2. Anubhab Gupta & Heng Zhu & Miki Khanh Doan & Aleksandr Michuda & Binoy Majumder, 2021. "Economic Impacts of the COVID−19 Lockdown in a Remittance‐Dependent Region," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 466-485, March.
    3. Ioannis Chatziantoniou & David Gabauer & Hardik A. Marfatia, 2022. "Dynamic connectedness and spillovers across sectors: Evidence from the Indian stock market," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(3), pages 283-300, July.

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    More about this item

    Keywords

    Demonetization; Loss; Currency shock; Financial diaries; India;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • D10 - Microeconomics - - Household Behavior - - - General

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