Research

Working Papers

Does Vertical Political Alignment Impact Local Economic Growth? Night-Lights Evidence from India (Job market paper)
Slides

Abstract This paper investigates whether vertical political alignment—where the national legislator (MP) and the state legislator (MLA) belong to the same political party—improves local economic growth. While “double-engine” rhetoric suggests that partisan synergy across levels of government streamlines development through coordinated investment, alignment may also encourage rent-seeking or weaken inter-party accountability. I implement a regression discontinuity design exploiting close state assembly elections in India from 1999 to 2013, comparing constituencies that narrowly achieve alignment with those that narrowly fail to do so. Using high-resolution satellite night-lights data merged with administrative infrastructure measures, I provide a precise test of the coordination hypothesis. I find that alignment has a precisely estimated zero effect on night-lights growth and public goods provision; point estimates range from −0.46 to 1.02 percentage points. These results are robust across optimal bandwidth selectors and functional forms, allowing me to rule out even modest aggregate growth effects. The findings suggest that in federal systems with overlapping jurisdictions, partisan synergy is insufficient to overcome deep-seated institutional frictions, challenging the view that centralized partisan control is a prerequisite for local economic development.

Can Aggregate Special Items Aid in Predicting Future Inflation?
(with Arthur Pellenq)

Abstract This paper examines whether incorporating accounting “special items” improves inflation forecasting within Phillips curve frameworks. Recent research highlights a strong relationship between aggregate earnings and subsequent macroeconomic outcomes, yet forecasts from the Survey of Professional Forecasters (SPF) appear to underutilize information embedded in aggregate earnings—particularly the special items component. We leverage the informational content of special items, which respond promptly to macroeconomic news shocks and are largely driven by negative earnings surprises, to assess their predictive power for future inflation. While our baseline results do not support the hypothesis that special items significantly enhance inflation forecasts relative to standard Phillips curve specifications, we find that using special items as a proxy for economic slack produces estimates closely aligned with those obtained using conventional slack measures. Overall, the results suggest that special items contain macro-relevant information but offer limited incremental forecasting gains beyond established indicators.

New Age Pension Reforms and Household Consumption: Evidence from India

Abstract This paper studies the impact of India’s 2004 pension reforms on monthly per capita household consumption, exploiting variation in pension benefits induced by the reform. Using repeated cross-sectional data from the Indian National Sample Survey spanning 1994 to 2012, I compare consumption outcomes for reform-affected households relative to unaffected groups. The empirical results reveal a substantial decline in per capita household consumption of approximately 27 percent among impacted households, with a 95 percent confidence interval ranging from −65 percent to −18 percent. A supplementary analysis quantifies the relationship between public pension wealth and private consumption, showing that a marginal reduction of one Indian rupee in pension wealth leads to a 0.0033 rupee decline in household consumption. These findings provide evidence of a strong link between public pension generosity and household consumption behavior in a developing-country context.