Title: When firms matter: Propagation of firm-level shocks through production network Speaker: Girish Bahal, Assistant Professor, University of Western Australia Business School Abstract: Recent evidence shows how sector level shocks can propagate through the production network into aggregate fluctuations. Propagation of firm-level shocks, however, has been less studied. In this paper, we show how i) intersectoral firm-level network linkages between sectors and ii) switching rigidities between customer-supplier relation can explain how firm-level shocks can propagate into aggregate economy-wide fluctuations. This result holds even…

Title: Third-Party Audit and Tax Compliance - Evidence from a Notched Policy in India Speaker: Bhanu Gupta, Ph.D. Candidate, University of Michigan Abstract: Can resource-constrained tax administrations rely on third-party auditors to overcome conflict of interest and increase compliance? We evaluate a notched policy in India which mandates firms to undergo third-party audit if their reported revenue is above a threshold. We argue that static bunching estimates can be biased in a dynamic setting where firms optimize over several time-periods. Using sample…

Title: Public Schools Can Improve Student Outcomes: Evidence from a Natural Experiment in India Speaker: Naveen Kumar, Ph.D. Candidate, University of Illinois at Chicago Abstract: I exploit a natural experiment in education policy in India to examine the effects of creating high-quality public schools. The “model” schools program established schools that admit students through an entrance exam. I estimate the effect of model schools on educational outcomes using a fuzzy Regression Discontinuity Design based upon the entrance exam cutoffs. With…

Title: The Supply-Side Effects of India's Demonetization Speaker: Giri Subramaniam, Ph.D. Candidate, Boston College Abstract: I study the supply-side effects of a unique monetary shock – the 2016 Indian demonetization – that made 86% of currency in circulation illegal overnight. Exploiting cross-sectional variation in firm and industry characteristics that correlate with exposure to the informal sector and with cash usage, I find that firms that obtain larger shares of labor or material inputs from the informal sector, experienced declines in their labor and material…

Title: In the danger zone! Regulatory uncertainty and voluntary bank capital surpluses Speaker: Aakriti Mathur, Ph.D. Candidate, The Graduate Institute, Geneva Abstract: Banks voluntarily hold substantially more capital than required by regulators. Understanding why is important for forecasting the extent to which banks would use this surplus to support lending in a crisis, and for calibrating macro-prudential policy. This paper studies the role of uncertainty about the requirements themselves, which could heighten any precautionary motive to avoid accidental breach of minimum requirements.…

Title: Early Life Exposure to Outdoor Air Pollution: Effect on Child Health in India Speaker: Prachi Singh, Ph.D. Candidate, ISI Delhi & Associate Fellow, Brookings India Abstract: This paper examines effect of outdoor air pollution on child health in India by combining satellite PM2.5 data with geo-coded Demographic and Health Survey of India(2016). We use an instrumental variable strategy for identification as local pollution levels may be endogenous due to local household behavioural choices like participation in local fuel wood market, burning…

Title: Selling Identical Objects Speaker: Sushil Bikhchandani, Professor of Economics, Anderson School of Management, UCLA Abstract: We investigate optimal selling mechanisms for identical objects. We analyze two settings: (i) decreasing marginal values and (ii) increasing marginal values. Thus, buyer values are neither additive nor independent. With decreasing marginal values, we show that under a sufficient condition it is optimal to sell the first unit deterministically. We describe other properties of optimal mechanisms and use these results to show that for…