My new paper, now in print, examines how the 2005 Pakistan earthquake triggered firm-level over-adaptation in response to policy uncertainty. Fragile intermediaries, dependent on both capital and labour, suffered the greatest productivity losses as firms, operating amid weak

The 2005 Pakistan earthquake generated asymmetric firm-level disruptions, driving heterogeneous responses based on capital-labour intensity. Labour-intensive firms demonstrated resilience, maintaining sales despite capital stock destruction. Fragile intermediaries, firms with

Firm adaptation strategies reflected constrained optimisation in the face of uncertainty. Skilled labour retention was prioritised, while non-production roles were reduced to minimise costs. Firms extended operational hours and diversified market reach to stabilise revenue

Infrastructure destruction compounded firm vulnerability, necessitating self-provisioning through backup power solutions. This response, shaped by rational expectations of minimal government aid, led to adaptive misallocation, a distortion where firms over-invested in short-term

The empirical findings motivate a theoretical model of adaptive misallocation, capturing the distortions induced by firm expectations of minimal government aid. Firms optimise under uncertainty by reallocating resources toward short-term adaptive strategies, such as backup

By integrating expectations into the adaptation process, the model challenges standard narratives in disaster economics. Instead of firms under-investing in resilience due to expected aid (moral hazard), they over-invest in defensive adaptation due to policy uncertainty. This

Eid Mubarak!

The VDEV/CEPR/BREAD seminars' YouTube channel offers a rich archive of past talks. Highly recommended for staying up to date with the latest in the field! #EconTwitter

I am very happy to share a new labour of love: my new website which is now live: maharehman.github.io

End of semester afternoon at Cornell Botanic Gardens - serene and bountiful.

There cannot be an escalation to this aggression. Let better sense and peace prevail.

Haha. One advantage of being based in Ithaca - You get to avoid the chaos of JFK’s long security lines if you board from here and only transit via JFK. This alone makes me super thankful.

And twitter is my attempt to distract myself today as I now await for Pakistan's airspace and the Lahore airport to open again. Super Distressing.

Cornell, Ithaca by the night. Pictured: “PolyForm” — a radiant, color-shifting pavilion by Jenny Sabin Studio. This permanent structure responds to light and movement, celebrating the fusion of design, science, and human connection.