ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Demonetisation and 'Black' Money

Demonetisation and 'Black' Money

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A Correspondent Writes:

VAGUE REPORTS of a possible demonetisation of the currency are again floating about. Demonetisation could mean one of a number of things, each with its own purposes and implications. The most painless form of demonetisation would be that implemented by France a few years ago, when one new 'heavy' franc was exchanged for 1,000 old francs and prices, wages, exchange rates, etc, were all correspondingly adjusted. Such a measure is completely neutral in its real effect, though it may make a psychological impact in an inflationary situation. The German demonetisation after the last war was of another type.

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