Rogoff: India's Modi Takes 'Very Radical' Cash Move

The transcript discusses India's sudden demonetization policy, announced by the Prime Minister, which aimed to combat corruption and crime by invalidating large currency notes. Ken Rogoff provides his perspective, suggesting a gradual approach to avoid collateral damage. The role of the RBI and the central bank's response are examined, highlighting disagreements on the policy's execution. The impact on currency volatility and economic challenges are discussed, emphasizing the need for better planning and financial inclusion. Critics and supporters of the policy and Rogoff's book, 'The Curse of Cash,' are also mentioned.

What was the main difference between the Indian Prime Minister's demonetization policy and Ken Rogoff's proposal?

• Both policies were gradual.

• Both policies were sudden.

• The Indian policy was gradual, while Rogoff's was sudden.

• The Indian policy was sudden, while Rogoff's was gradual.

What role did the Reserve Bank of India (RBI) play in the demonetization process?

• The RBI opposed the demonetization from the start.

• The RBI was initially supportive but later had reservations about the tactics.

• The RBI fully supported the sudden implementation.

• The RBI was not involved in the process.

What was one of the immediate economic consequences of demonetization in India?

• An increase in foreign investments.

• An increase in the value of the rupee.

• Stability in the currency market.

• A decrease in the value of the rupee.

How did the RBI attempt to manage the currency shortage following demonetization?

• By borrowing currency from other countries.

• By introducing new high-denomination notes.

• By limiting withdrawals from certain bank accounts.

• By printing more currency immediately.

What is one of the broader goals of demonetization according to the Indian Prime Minister?

• To increase the use of cash in the economy.

• To decrease the number of bank accounts.

• To promote the use of foreign currency.

• To fight corruption and crime.

What is Ken Rogoff's stance on the use of cash in economies?

• He supports the complete elimination of cash.

• He advocates for less cash, not no cash.

• He has no opinion on the use of cash.

• He believes cash should be used more widely.

What is a significant challenge in implementing demonetization in developing economies like India?

• Lack of financial inclusion.

• Excessive financial inclusion.

• Over-reliance on digital payments.

• High levels of foreign investment.