Welcome! I am an Assistant Professor of Economics at Michigan State University.
I received my Ph.D. in Economics from the University of Wisconsin–Madison in 2024. Here is my CV.
Research interest: macro-finance, firm dynamics, and international trade
My research combines quantitative models with microdata to study how firm beliefs and market frictions shape corporate investment and financial decisions and its implications for resource allocation, shock transmission, and business cycle fluctuations.
Contact Information:
Email: zhouwe91 [at] msu.edu
Office: 207 Old Botany
Job Market Paper:
The Firm Balance Sheet Channel of Uncertainty Shocks [SSRN]
Winner of the Best Ph.D. Paper Award, Sponsored by Bank of Canada, 2023 Northern Finance Association
Donald D. Hester Dissertation Fellowship for excellence in conducting research in macroeconomics
UW-Madison Conference Presentation Award
Finalist for Best Paper Award in Corporate Finance, FMA 2024
Presented at: UMBC, Michigan State, HKUST, CityU, PHBS, CUHK, SUFE{Econ, Finance}, AEA/ASSA (2024), Finance Down Under (2023), U.S. Treasury Department Office of Financial Research PhD Symposium (2023), Econometric Society North America Summer Meeting (2023), EEA-ESEM (2023), Northern Finance Association Ph.D. Session (2023), American Finance Association Ph.D. Poster Session (2023), Asian Meeting of Econometric Society (2023), Midwest Macro (Spring 2023, Invited session), CES North American Conference Rising Star Session (2023), UChicago BFI-Macro-Finance Research Program Summer Session for Young Scholars (2022), Wisconsin School of Business (2022), China Economist Society Annual Meeting (2022), Minnesota-Wisconsin International/Macro Workshop (Spring 2022)
Travel Grants: Becker Friedman Institute, American Finance Association, Northern Finance Association, University of Melbourne, Chinese Economists Society
The Aggregate Impact of Anti-dumping Policy: Theory and Evidence with Kim J. Ruhl NEW VERSION COMING SOON!
With more than 1900 anti-dumping duties in force as of 2021, anti-dumping policy has become a major impediment to free trade. In this paper, we embed anti-dumping policy into a general equilibrium trade model with heterogeneous firms and monopolistic competition to study the aggregate implications of anti-dumping policies. In our model, realistic features of the current anti-dumping policy lead exporters to charge higher prices and generate lower price dispersion across exporters. We test the model mechanisms using detailed custom-level data and differences-in-difference method exploiting the 2004 EU enlargement as a quasi-natural experiment. We find that export prices of Chinese products to the new member states align well with the model predictions. Quantitative analysis suggests that the welfare cost of anti-dumping policies in the U.S. is equivalent to a 6 percent tariff that is uniformly applied to all firms.
Debt covenants are pervasive in debt contracts. In this paper, we embed debt covenants into a workhorse real business cycle model with defaultable debt to study the macroeconomic implications of debt covenants. In our model, creditors penalize firms when debt covenants are violated. We show such a mechanism significantly reduces debt dilution and default over the business cycles. Furthermore, reduced debt dilution due to debt covenants also mitigates the debt overhang problem and thus boosts capital accumulation. Compared to counterfactual economies without covenants, the baseline economy with debt covenants experiences endogenous stabilization of macroeconomic shocks, lower business cycle volatility, and higher capital, output, and consumption levels.