Assistant Professor

Institute for Empirical Research in Economics, University of Zurich and

Study Center Gerzensee

Research Interests

International Finance, International Trade, Macroeconomics

Curriculum Vitae

[pdf]

Teaching

Advanced Micro II, University of Zurich, Spring 2010

Instruments of Financial Markets, Study Center Gerzensee, Fall 2009

Inflation Targeting and Monetary Policy Transmission, Study Center Gerzensee, Spring 2010

Math Introduction, Study Center Gerzensee, Spring 2010

Working Papers

Legal Enforcement, Public Supply of Liquidity and Sovereign Risk

Sovereign debt crises in emerging markets are usually associated with widespread liquidity and banking crises in the economy. The conventional view is that the domestic financial turmoil is the consequence of foreign retaliation, but there is no clear empirical evidence supporting the application of “classic" default penalties. This paper emphasizes a direct link between sovereign default and liquidity crises, building on two natural assumptions: (i) government bonds represent a source of liquidity due to weak contract enforcement and lack of collateral; (ii) the government cannot discriminate between domestic and foreign agents in the event of default. In this context external debt emerges even in absence of classic penalties and government default is countercyclical, triggers a liquidity crunch and amplifies output volatility. The paper further analyzes the government incentives to undertake financial reforms that enhance private provision of liquidity.

International Trade and Technological Diversification

Developing countries feature much higher fluctuations in the growth rate of per capita income than developed ones, partly due to specialization in volatile industries. This paper justifies this specialization pattern drawing on two observations: i) at the industry level, the standard deviation of industry-specific productivity shocks is negatively related to the number of intermediate inputs used in final production; ii) institutional quality represents a source of comparative advantage across industries with different number of inputs due to contractual frictions along the supply chain. This framework is then used to study the consequences of institutional changes on specialization and welfare.

Contact information
Institute for Empirical Research in Economics
University of Zurich
Mühlebachstrasse 86
CH-8008 Zürich

Phone: +41 (0)44 634 55 69
Email: brutti@iew.uzh.ch

update: February 2010