Pierre Mabille

Welcome! I am an Assistant Professor of Finance at INSEAD.

Research interests: household finance, real estate, asset pricing, macroeconomics.

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Email: pierre.mabille@insead.edu

Working Papers

The Missing Home Buyers: Regional Heterogeneity and Credit Contractions (SSRN)

Revise & Resubmit, Review of Financial Studies

Winner of the CEPR-TFI Household Finance Award, 2020

Winner of the AREUEA Homer Hoyt Dissertation Award (honorable mention), 2021

Media: INSEAD Knowledge

Abstract: This paper demonstrates that the protracted decrease in young homeownership since the Great Recession was driven by high-house price regions, despite credit standards changing mostly nationally. Using a panel of U.S. metro areas, I calibrate an equilibrium spatial macro-finance model with overlapping generations of mobile households. Aggregate and regional housing dynamics are explained more by the heterogeneous impacts of an aggregate credit tightening than by local shocks. Lower Millennial income and wealth amplify this effect. The impact of subsidies to first-time buyers is dampened, because they fail to stimulate regions that suffer larger busts. Place-based subsidies achieve larger gains.

Affordable Housing and City Welfare (NBER Working Paper 25906, SSRN), with Jack Favilukis and Stijn Van Nieuwerburgh

Revise & Resubmit, Review of Economic Studies

Media: VoxEU, MarketWatch, Global Housing Watch, Ideas At Work, Gothamist, LA Times, NY Daily News, The Urbanist, NPR

Abstract: Housing affordability is the main policy challenge for most large cities in the world. Zoning changes, rent control, housing vouchers, and tax credits are the main levers employed by policy makers. How effective are they at combatting the affordability crisis? We build a dynamic stochastic spatial equilibrium model to evaluate the effect of these policies on the well-being of its citizens. The model endogenizes house prices, rents, construction, labor supply, output, income and wealth inequality, the location decisions of households within the city as well as inter-city migration. Its main novel features are risk, risk aversion, and incomplete risk-sharing. We calibrate the model to the New York MSA. Housing affordability policies carry substantial insurance value but affect aggregate housing and labor supply and cause misallocation in labor and housing markets. Housing affordability policies that enhance access to this insurance especially for the neediest households create substantial net welfare gains.

Unsecured Credit Supply Risk and Bond Prices (SSRN)

Abstract: Changes in credit supply induce large and frequent variations in households' access to unsecured debt. They generate a novel financial precautionary motive, which compounds the classical motive associated with idiosyncratic income risk, as borrowers accumulate risk-free bonds to hedge against them. Using a structural model, I estimate that this motive is an important driver of Treasury rates over the business cycle. It explains the historically low level of real rates in the last decade despite consumption growth, solving a "post-Great Recession risk-free rate puzzle". It is also critical for the volatility and comovement of household balance sheet and macroeconomic moments.

Intermediary-Based Loan Pricing, with Olivier Wang

Abstract: We study how shocks to banks transmit to both the price and non-price terms of loans, in a model of multidimensional contracting between heterogeneous risky borrowers and intermediaries with limited lending capacity. The elasticities of loan demand and default rates to interest rates are sufficient statistics which predict how the cross-section of loan terms and banks’ portfolio risk react to changes in lenders’ capital, funding costs and regulation, and borrowers’ risk and liquidity. Our results explain differences in the pass-through of shocks between markets and risk categories. These elasticities also drive the dynamic incidence of credit crises through impact and persistence.


Internationalization versus Regionalization in the Emerging Stock Markets, with Virginie Coudert and Karine Herve

International Journal of Economics and Finance, Vol. 20(1), pp. 16-27, 2015