The recent decline in gross domestic product (GDP) growth in India raised a debate about whether it is a trend or a business cycle slowdown. We observe a cyclical downturn post-global financial crisis due to external and domestic conditions. With global recovery strengthening and appropriate...

A key prediction of dynamic labor demand models is that firing restrictions attenuate firms' employment responses to economic fluctuations. We provide the first direct test of this prediction using data from India. We exploit the fact that rainfall fluctuations, through their effects on...

A key prediction of models of dynamic labor demand is that restrictions on firing attenuate firms' employment responses to economic fluctuations. The authors provide the first direct empirical test of this prediction using data on industrial firms in India. They exploit the fact that fluctuation...