Welcome! My name is Wentao Zhou.
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 interests: macro-finance, firm dynamics, and international trade
Contact Information:
Email: zhouwe91 [at] msu.edu
Office: 207 Old Botany
I. Firm Precautionary Behavior and Its Macroeconomic Implications
The Firm Balance Sheet Channel of Uncertainty Shocks [ Job Market Paper ]
Best Ph.D. Paper Award, Sponsored by Bank of Canada, Northern Finance Association 2023
Donald D. Hester Dissertation Fellowship for excellence in conducting research in macroeconomics
Finalist for the Best Paper Award in Corporate Finance, Financial Management Association 2024
Presented at: Leicester{Finance}, CBCF(2025), USTC, XMU, CUFE, FMA(2024), 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, UW-Madison Conference Presentation Award
We argue that monetary policy is less effective at stimulating investment during periods of elevated firm-level volatility. We decompose and quantify three effects that contribute to such volatility-dependent monetary policy transmission: a `wait-and-see' channel, a financial constraint channel, and an interaction effect that amplifies each channel. We show that our model mechanisms are consistent with empirical patterns.
[New Draft Coming Soon!]
Summer Research Fellowship, UW-Madison
The interaction between liquidity constraints and firms' inventory management acts as a decelerator for monetary policy transmission.
Presentation: IAER Macro Workshop, AEA (2026)
II. International Macroeconomics and Trade
The Aggregate Impact of Anti-dumping Policy: Theory and Evidence with Kim J. Ruhl and Xing Xu
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.
[New Draft Coming Soon!]
III. Dynamics of Long-term Debt and Business Cycle Fluctuations
Debt Covenants as Macroeconomic Stabilizers with Min Fang
Presentation: CES-NA (2025), CICM (2024)
Debt covenants reduce business cycle volatility by mitigating shareholders' incentives to dilute existing creditors, especially during bad times.
Call Back or Buy Back? A Liquidity Theory of Callable Bonds with Murillo Campello, Min Fang, Chi-Yang Tsou [Work-in-Progress]