Luisa Lambertini
Full Professor
luisa.lambertini@epfl.ch +41 21 693 00 50 https://cfi.epfl.ch/team/lambertini/
Citizenship: Italian
Personal Webpage
https://cfi.epfl.ch/team/lambertini/
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Biography
Luisa Lambertini is Full Professor at the Ecole Polytechnique Federale de Lausanne (EPFL), where she holds the Chair of International Finance.She received her Ph.D. in Economics from the University of California at Berkeley in 1995, her Master of Science in Economics from Warwick University in 1989 and a Laurea cum Laude from the Universita' degli Studi di Bologna in 1987.
Prior to coming to EPFL, Professor Lambertini was Associate Professor at Claremont McKenna College 2005-06, Associate Professor at Boston College 2003-06 and Assistant Professor at the University of California at Los Angeles 1995-03.
Professor Lambertini's research is in international finance, open-economy macroeconomics and political economy. She studies how monetary and fiscal policies affect the economy, how they interact and how they can be used to achieve good economic outcomes and improve social welfare. Professor Lambertini's research focuses on how monetary and fiscal institutions should be designed to successfully mitigate the impact of unexpected shocks while pursuing long-run goals consistent with price stability and fiscal sustainability. These issues are even more important for small open economies in an interdependent world and for countries that adopt a common currency.
Professor Lambertini has published articles in the American Economic Review, the Review of Economic Studies, the European Economic Review, the Journal of International Economics and the Economic Journal, among others. She was a Consultant in the Fiscal Policies Division of the European Central Bank and she has organized several international conferences.
More details on my CV
Publications
Infoscience publications
Infoscience
[1] The Pass-through of Bank Capital Requirements to Corporate Lending Spreads
Journal of Financial Stability
2022
DOI : 10.1016/j.jfs.2021.100910
[2] Stress tests and loan pricing—Evidence from syndicated loans
Finance Research Letters
2021-07-21
DOI : 10.1016/j.frl.2021.102349
[3] Fiscal Policy, Relative Prices and Net Exports in a Currency Union
2020
[4] Mortgage Supply and Capital Regulation in a Low Interest Rate Environment
2020
[5] Does Austerity Go Along With Internal Devaluations?
IMF Economic Review
2019-08-13
DOI : 10.1057/s41308-019-00086-0
[6] Mortgage Default in an Estimated Model of the U.S. Housing Market
Journal of Economic Dynamics and Control
2017
DOI : 10.1016/j.jedc.2017.01.007
[7] Expectations-driven cycles in the housing market
Economic Modelling
2017
DOI : 10.1016/j.econmod.2016.10.004
[8] Optimal exchange rate flexibility with large labor unions
Journal of International Money and Finance
2016
DOI : 10.1016/j.jimonfin.2016.01.001
[9] Leaning Against Boom-Bust Cycles in Credit and Housing Prices
Journal of Economic Dynamics and Control
2013
DOI : 10.1016/j.jedc.2013.03.008
[10] Expectation-Driven Cycles in the Housing Market: Evidence from Survey Data
Journal of Financial Stability
2013
DOI : 10.1016/j.jfs.2013.07.006
[11] Risky Mortgages in a DSGE Model
International Journal of Central Banking
2011
[12] Monetary-Fiscal Interactions with a Conservative Central Bank
Scottish Journal of Political Economy
2006
DOI : 10.1111/j.1467-9485.2006.00372.x
[13] Exchange Rates and Fiscal Adjustments; Evidence from the OECD and Implications for the EMU
Contributions to Macroeconomics
2005
DOI : 10.2202/1534-6005.1168
[14] The Fiscal Politics of Big Governments: Do Coalitions Matter?
Economics for an Imperfect World: Essays in Honor of Joseph Stiglitz; MIT Press,2003.
[15] Interactions of Commitment and Discretion in Monetary and Fiscal Policies
American Economic Review
2003
DOI : 10.1257/000282803322655428
[16] Symbiosis of Monetary and Fiscal Policies in a Monetary Union
Journal of International Economics
2003
DOI : 10.1016/S0022-1996(02)00048-X
[17] Endogenous Debt Constraints in Lifecycle Economies
Review of Economic Studies
2003
DOI : 10.1111/1467-937X.00252
[18] Excess Asset Returns and Limited Enforcement
American Economic Review
2002
DOI : 10.1257/000282802320189131
[19] Monetary-Fiscal Policy Interactions and Commitment Versus Discretion in a Monetary Union
European Economic Review
2001
DOI : 10.1016/S0014-2921(01)00134-9
[20] On The Redistributive Property of Budget Deficits
Institutions, Politics and Fiscal Policy; Springer,2000.
p. 3-18.DOI : 10.1007/978-1-4615-4555-2_1.
[21] Inflation Convergence with Realignments in a Two-Speed Europe
Economic Journal
1992
DOI : 10.2307/2234518
Prof. Luisa Lambertini
Journal Articles
2022
The Pass-through of Bank Capital Requirements to Corporate Lending Spreads
Journal of Financial Stability
2022
DOI : 10.1016/j.jfs.2021.100910
2021
Stress tests and loan pricing—Evidence from syndicated loans
Finance Research Letters
2021-07-21
DOI : 10.1016/j.frl.2021.102349
2020
Fiscal Policy, Relative Prices and Net Exports in a Currency Union
2020
Mortgage Supply and Capital Regulation in a Low Interest Rate Environment
2020
2019
Does Austerity Go Along With Internal Devaluations?
IMF Economic Review
2019-08-13
DOI : 10.1057/s41308-019-00086-0
2017
Mortgage Default in an Estimated Model of the U.S. Housing Market
Journal of Economic Dynamics and Control
2017
DOI : 10.1016/j.jedc.2017.01.007
Expectations-driven cycles in the housing market
Economic Modelling
2017
DOI : 10.1016/j.econmod.2016.10.004
2016
Optimal exchange rate flexibility with large labor unions
Journal of International Money and Finance
2016
DOI : 10.1016/j.jimonfin.2016.01.001
2013
Leaning Against Boom-Bust Cycles in Credit and Housing Prices
Journal of Economic Dynamics and Control
2013
DOI : 10.1016/j.jedc.2013.03.008
Expectation-Driven Cycles in the Housing Market: Evidence from Survey Data
Journal of Financial Stability
2013
DOI : 10.1016/j.jfs.2013.07.006
2011
Risky Mortgages in a DSGE Model
International Journal of Central Banking
2011
2006
Monetary-Fiscal Interactions with a Conservative Central Bank
Scottish Journal of Political Economy
2006
DOI : 10.1111/j.1467-9485.2006.00372.x
2005
Exchange Rates and Fiscal Adjustments; Evidence from the OECD and Implications for the EMU
Contributions to Macroeconomics
2005
DOI : 10.2202/1534-6005.1168
2003
Interactions of Commitment and Discretion in Monetary and Fiscal Policies
American Economic Review
2003
DOI : 10.1257/000282803322655428
Symbiosis of Monetary and Fiscal Policies in a Monetary Union
Journal of International Economics
2003
DOI : 10.1016/S0022-1996(02)00048-X
Endogenous Debt Constraints in Lifecycle Economies
Review of Economic Studies
2003
DOI : 10.1111/1467-937X.00252
2002
Excess Asset Returns and Limited Enforcement
American Economic Review
2002
DOI : 10.1257/000282802320189131
2001
Monetary-Fiscal Policy Interactions and Commitment Versus Discretion in a Monetary Union
European Economic Review
2001
DOI : 10.1016/S0014-2921(01)00134-9
1992
Inflation Convergence with Realignments in a Two-Speed Europe
Economic Journal
1992
DOI : 10.2307/2234518
Theses
2021
Essays on Mortgage Supply in a Low Rate Environment and Gender Effects of Covid-19
Lausanne, EPFL, 2021.DOI : 10.5075/epfl-thesis-10868.
Essays on the Economics of Innovation: Incentives, Diffusion, and Disparity
Lausanne, EPFL, 2021.DOI : 10.5075/epfl-thesis-10813.
2020
The triangular value of patents
Lausanne, EPFL, 2020.DOI : 10.5075/epfl-thesis-10209.
2019
Adversarial Analytics
Lausanne, EPFL, 2019.DOI : 10.5075/epfl-thesis-9731.
2018
Financial Stability and the Macroeconomy
Lausanne, EPFL, 2018.DOI : 10.5075/epfl-thesis-8936.
2016
Credit Supply and the Macroeconomy
Lausanne, EPFL, 2016.DOI : 10.5075/epfl-thesis-7371.
2014
Financial Frictions within the Macroeconomy
Lausanne, EPFL, 2014.DOI : 10.5075/epfl-thesis-6227.
Book Chapters
2003
The Fiscal Politics of Big Governments: Do Coalitions Matter?
Economics for an Imperfect World: Essays in Honor of Joseph Stiglitz; MIT Press,2003.
2000
On The Redistributive Property of Budget Deficits
Institutions, Politics and Fiscal Policy; Springer,2000.
p. 3-18.DOI : 10.1007/978-1-4615-4555-2_1.
Working Papers
2021
Stress tests and loan pricing—Evidence from syndicated loans
2021-07-21
2019
The Pass-through of Bank Capital Requirements to Corporate Lending Spreads
2019-05-27
Does Austerity Go Along with Internal Devaluations?
2019-01-15
2015
Mortgage Default in an Estimated Model of the U.S. Housing Market
2015
2013
Expectation-Driven Cycles in the Housing Market: Evidence from Survey Data.
2013
2012
Mortgage Amortization and Amplification
2012
2010
Expectations-Driven Cycles in the Housing Market
2010
2009
Optimal Exchange-Rate Targeting with Large Labor Unions
2009
2008
Is U.S. Fiscal Policy Optimal?
2008
2007
Optimal Fiscal Policy in a Monetary Union
2007
2004
Are Budget Deficits Used Strategically?
2004
2003
Volatility and Sovereign Default
2003
Selected publications
| Luisa Lambertini Accepted subject to an editorial revision at Economics & Politics |
Are Budget Deficits Used Strategically? |
| Luisa Lambertini Scottish Journal of Political Economy, Vol. 53, No. 1, pp. 90-128 |
Monetary-Fiscal Interactions with a Conservative Central Bank |
| Luisa Lambertini and Jose' Tavares Contributions to Macroeconomics: Vol. 5: No. 1, Article 11 |
Exchange Rates and Fiscal Adjustments: Evidence from the OECD and Implications for EMU |
| Avinash Dixit and Luisa Lambertini American Economic Review, Vol. 93, No. 5, December 2003 |
Interactions of Commitment and Discretion in Monetary and Fiscal Policies |
| Avinash Dixit and Luisa Lambertini Journal of International Economics, Volume 60, Issue 2, Pages 235-247, August 2003 (lead article) |
Symbiosis of Monetary and Fiscal Policies in a Monetary Union |
| Costas Azariadis and Luisa Lambertini Review of Economic Studies, Volume 70, No. 3, Pages 1-27, July 2003 |
Endogenous Debt Constraints in Lifecycle Economies |
| Luisa Lambertini and Costas Azariadis Economics for an Imperfect World: Essays in Honor of Joseph Stiglitz, December 2003 |
The Fiscal Politics of Big Governments: Do Coalitions Matter? |
| Costas Azariadis and Luisa Lambertini American Economic Review, Vol. 92, No. 2, May 2002 |
Excess Asset Returns and Limited Enforcement |
| Avinash Dixit and Luisa Lambertini European Economic Review, (45)4-6, pp. 987-997, January 2001 |
Monetary-Fiscal Policy Interactions and Commitment Versus Discretion in a Monetary Union |
| Luisa Lambertini Institution, Politics and Fiscal Policy, edited by Rolf Strauch and Jurgen Von Hagen, 2000 |
The Redistributive Property of Budget Deficits |
| Luisa Lambertini, Marcus Miller and Alan Sutherland Economic Journal, Vol. 102, March 1992 |
Inflation Convergence with Realignments in a Two-Speed Europe |
Research
Current Research Projects
Housing Models with Risky MortgagesThis project develops a model with housing and risky mortgages. The returns to housing are subject to aggregate and idiosyncratic risk. Mortgages are defaulted in equilibrium when housing returns are low. To capture recent events, we consider an increase in the riskiness of mortgages. An increase in mortgage risk raises default and generates a credit crunch and a recession.
Alternative Mortgage Contracts
The recent financial crisis and the ensuing recession have their roots in the bursting of the housing bubble in the United States. Academic and Policy discussion have pointed to a number of likely contributions to the housing bubble, among which the appearance of exotic mortgage products (interest only, negative amortization and pay option Adjustable-Rate Mortgages). These nonstandard mortgage products share a feature: the reduction in the initial monthly payments relative to conventional Fixed-Rate Mortgage contracts. this project finds that low early or even negative amortization increases the default rate and intensifies the negative effects of a housing risk shock on aggregate consumption and output.
Boom-Bust Cycles in Housing Markets
This project analyzes housing market boom-bust cycles driven by changes in households' expectations. We explore the role of expectations on productivity and other shocks originating from the housing market, the credit market and the conduct of monetary policy. We find that expectations related to different sectors of the economy can generate booms in the housing market in accordance with empirical findings. Only expectations of future expansionary monetary policy that are not ful filled can generate a macroeconomic recession. Regarding the credit market, increased access to credit generates boom-bust cycles only if it is expected to be reversed in the near future.
Monetary and Macro-prudential Policies in Boom-bust Cycles
The recent financial crisis has demonstrates the need for a global macro-prudential approach to supervision and regulation of the financial sector. The projects analyzes the implementation and effectiveness of macro-prudential tools by evaluating policies that make the Loan to Value ratio respond to macroeconomic conditions and vary in a counter-cyclical manner. It finds that interest rate rules that respond to credit growth and countercyclical loan-to-value ratios reduce macroeconomic volatility and improve welfare relative to an estimated Taylor-type interest rate rule.
The Role of Bank Capital
The financing choice of financial institutions is a difficult one, as equity financing is costlier than short-term financing but, at the same time, bank capital is an essential cushion against adverse shocks. Since the return to bank equity is risky while the return to deposit is typically risk-free, savers require a premium for holding bank equity. During economic downturns the return to equity falls and savers experience a reduction of wealth and decrease the amount of deposits. They may require an even higher premium to hold bank equity. So, not only the value of bank equity goes down during downturns, but also it becomes even more difficult for bankers to raise additional equity. This might lead to a decline in loans that contracts the economy even further. This project develops a model for the financing decision of banks and the portfolio decision of savers. The goal is to analyze the effect of bank capital regulation (as required by Basel III) as well as recent bank recapitalization efforts during the financial crisis.
A Macroeconomic Model of Global Banking
The recent crisis has underlined the vulnerability to systemic risk of the Swiss economy, given its distinctively large financial sector compared to the size of the economy. International regulators stress the need for macro-prudential standards and tougher restrictions on capital adequacy and leverage ratios for its largest two banks, whose liability total about 600% of Switzerlands GDP. At the same time, some Swiss banks have been severely affected by the U.S. sub-prime crisis and the subsequent freeze in the interbank market. This project plans to analyze bank regulation and policy options for economies with large financial sectors like Switzerland.
Teaching & PhD
Teaching
Financial engineering