The recent demonetisation has spurred the fears of decreased demand, i.e. low circulation of money supply as one of its effects, especially by the erstwhile hoarders of black money. Lower money supply can impact GDP growth by reduced consumption expenditure in the near term as there is a temporary liquidity crunch because of the government strictures. The government and the banking system might accumulate a huge sum of deposits (depends on how much old currency is not exchanged). We are facing a serious threat of low consumption expenditure, the signals of which are already in the air. So, how […]
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