Seybold Report ISSN: 1533-9211
Tarnnum Shekh
Research Scholar, Department of Management, Sharda University, Greater Noida, Uttar Pradesh – 201310, Email id: tarnnumshekh24@gmail.com
Pramod Kasana
Research Scholar, Department of Management, Sharda University, Greater Noida, Uttar Pradesh – 201310, Email id: Pramodkasan2@gamil.com
Dr. Anoop Pant
Professor, Department of Management, Sharda University, Greater Noida, Uttar Pradesh – 201310, Email id: pantanoop@gmail.com
Vol 17, No 10 ( 2022 ) | Licensing: CC 4.0 | Pg no:2362-2382 | Published on: 31-10-2022
Abstract
Demonetization refers to the process by which any money is stripped of its status as legal tender. There are four main reasons why governments around the world think a ban on certain currencies is necessary, these are to reduce inflation, corruption, money counterfeiting, and reliance on cash transactions. The best course of action for the development of any country, including India, is to find ways out of this kind of predicament.
This study discusses the current theories and hypothesis on the effects of demonetization on several kinds of investments in India, corporate investments, household investments, and even outward FDI from other countries. The impact of Demonetization on Savings in the Indian Economy is examined using the elementary Theoretical tools of Macroeconomics, International Economics, and Econometric analysis. “The investment decisions at business cycle frequencies are mostly determined by internal financial concerns”, has been taken as basic premises for this research. When trying to explain changes in investment at business cycle frequencies, internal cash flow is a more important determinant than user cost of capital or average Q. We also find that the neoclassical and Q models are unstable at business cycle frequencies, but the expanded models are stable when internal cash flow is incorporated into the empirical specification.
Keywords:
Demonetisation, Investment cycle, Market Equilibrium, Currency supply, Filtered Cash flow, Investments Filter.