News accounts and analyses on other blogs have usefully described and critically assessed the “demonetization” shock that Prime Minister Narendra Modi gave the Indian economy on November 8. Here we emphasize two features of Modi’s initiative that have been little noticed. First, the combination of demonetization followed by “remonetization” will transfer billions worth of US dollars from the Indian public to the Indian government. Second, the skewed pattern in which new notes will be injected will favor some sectors over others. Background To recap, Modi announced that, in order to fight...