This was what Nobel Prize winner Richard Thaler thought of India’s demonetisation

Nobel-winning economist Richard Thaler had said India’s demonetisation drive would reduce corruption but remarked “damn” when he came to know about introduction of Rs 2,000 currency notes

When India announced demonetisation last November, Nobel Prize winner Richard Thaler described it as a “policy I have long supported” but also remarked “damn” when it was brought to his notice that the government was introducing Rs 2,000 currency notes.

University of Chicago Professor Richard Thaler poses for pictures following a reception at the university after learning he had been awarded the 2017 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel on October 9, 2017 in Chicago, Illinois. (AFP Photo)

Thaler, a Professor of Economics and Behavorial Science at the University of Chicago, on Monday won the Nobel Prize in Economic Sciences.

Former RBI governor Raghuram Rajan is currently serving as Distinguished Service Professor of Finance, University of Chicago Booth School. Rajan, whose name was also doing the rounds for the Nobel Prize, recently stated that he was never in favour of demonetisation.

In a tweet on November 8, 2016 -- along with a link to a news article about demonetisation -- Thaler said, “This is a policy I have long supported. First step toward cashless and good start on reducing corruption.”

These tweets came from the Twitter handle ‘@R_Thaler’, which is not officially verified but was tagged by the official feed of the Nobel Prize.

“BREAKING NEWS The 2017 Prize in Economic Sciences is awarded to Richard H Thaler @R_Thaler @UChicago @ChicagoBooth #NobelPrize,” the official twitter feed of the Nobel Prize tweeted today.

On November 8, Prime Minister Narendra Modi had announced demonetisation of old Rs 500 and Rs 1,000 notes as part of efforts to curb illicit fund flows and corruption.

Thaler is the Charles R Walgreen Distinguished Service Professor of Economics and Behavioral Science and Director of the Center for Decision Research, Booth School of Business, University of Chicago.

The Royal Swedish Academy of Sciences said Thaler has incorporated psychologically realistic assumptions into analyses of economic decision-making.

“By exploring the consequences of limited rationality, social preferences, and lack of self-control, he has shown how these human traits systematically affect individual decisions as well as market outcomes,” it said in a release while announcing him as the winner of the Nobel prize.