Why the Indian Rupee Could Become a Hard Currency

The video explores the characteristics of international currencies, focusing on developed markets with deep financial systems. It examines India's efforts to formalize its economy through measures like demonetization and GST, leading to increased tax buoyancy and digital transactions. The discussion highlights how taxes create demand for currency, using the chartalist view. It also addresses fiscal policy challenges in emerging markets, emphasizing the need for a large tax base to stabilize the economy and potentially elevate the rupee to an international currency.

What are the characteristics of developed countries that allow their currencies to be considered hard currencies?

How does the Indian government aim to formalize its economy?

What impact has demonetization had on the Indian economy according to the text?

Explain how taxes create demand for a currency.

What are the challenges faced by emerging market economies in terms of fiscal policy during recessions?

Discuss the significance of tax buoyancy in relation to economic growth.

What factors will determine whether the rupee becomes a real international currency in the future?