The impact of India's demonetization on domestic agricultural trade

No Thumbnail Available

Date Issued

2023-01-01

Date Online

Language

en

Review Status

Peer Review

Access Rights

Limited Access Limited Access

Share

Citation

Aggarwal, Nidhi; and Narayanan, Sudha. 2023. The impact of India's demonetization on domestic agricultural trade. American Journal of Agricultural Economics 105(1): 316-340. https://doi.org/10.1111/ajae.12317

Permanent link to cite or share this item

External link to download this item

Abstract/Description

We examine the impact of an extreme monetary shock, India's demonetization of 2016, on domestic agricultural trade. Using data from around 3000 regulated markets for 35 major crops, we find that trade value fell by 16.3–16.8% in the short run, settling at 11.8–12.1% after eight months, driven primarily by a decline in prices. Triple difference estimates suggest sharpest impacts for kharif crops, perishables and crops with minimal government intervention. Markets far away from banks fared worse. Our results suggest that the implosion of value of agricultural trade domestically persisted two growing seasons beyond the one that coincided with the shock, whereas existing findings suggest that the negative impact on the economy as a whole dissipates in that time.

Author ORCID identifiers

Subjects

Countries
Organizations Affiliated to the Authors