ZHEN ZHOU
http://zhenzhouecon.com
zhen.zhou@nyu.edu
NEW YORK UNIVERSITY
Address
Phone
Placement Director: Alberto Bisin
Graduate Administrator: Marjorie Lesser
19 West Fourth St., 6th Floor
New York, NY 10012-1119
347-420-0240 (Mobile)
212-998-3843 (Office)
alberto.bisin@nyu.edu
marjorie.lesser@nyu.edu
212-998-8916
212-998-8923
Education
Ph.D. in Economics, New York University, 2010-2016 (expected)
Thesis Title: Essays on Financial Fragility
M.A. in Economics, Tsinghua University, 2008-2010
B.A. in Economics, Fudan University, 2004-2008
References
Professor Douglas Gale (Chair)
19 West Fourth Street, 6th Floor
New York, NY 10012-1119
212-998-8955 (office)
douglas.gale@nyu.edu
Professor Viral Acharya
44 West Fourth Street, KMEC 9-84
New York, NY 10012-1126
212-998-0354 (office)
vacharya@stern.nyu.edu
Professor Jess Benhabib
19 West Fourth Street, 6th Floor
New York, NY 10012-1119
212-998-8971 (office)
jess.benhabib@nyu.edu
Professor Laurent Mathevet
19 West Fourth Street, 6th Floor
New York, NY 10012-1119
212-998-8934 (office)
lmath@nyu.edu
Teaching and Research Fields
Primary fields: Financial Economics, Information Economics, Banking
Secondary fields: Economics of Networks, Macroeconomics
Teaching Experience
2012-2014
Fall, 2014
Fall, 2014
Summer, 2014
Summer, 2013
Intermediate Macroeconomics, NYU, Teaching Assistant for
Professor Jaroslav Borovicka
Hedge Fund Strategies, NYU Stern, Teaching Fellow for
Professor Manjiree Jog
Credit Risk and Financial Crisis (Module 3), NYU Stern,
Teaching Fellow for M.S. Risk Management Program
Intermediate Microeconomics, NYU, Instructor
Intermediate Macroeconomics, NYU, Instructor
Research Experience and Other Employment
Spring, 2015
Fall, 2012
Fall, 2009
Summer, 2007
Presentations and Conferences
2014
2015
GRI Fellow, NYU London
Research Assistant for Professor Vasiliki Skreta, NYU Stern
Visiting Student, University of Zurich
Analyst Intern, KPMG Shanghai
NYU Financial Economics Workshop
Micro Foundations for Macro Finance Workshop (Amsterdam,
participant)
The 10th PHD Meeting of RES (UCL)
2015 RES Annual Conference (Manchester)
2015 Annual Conference of SED (Warsaw)
NYU Financial Economics Workshop
Honors, Scholarships, and Fellowships
2010- 2015
Henry M. MacCracken Fellowship, NYU
2015
NYU C.V. Starr Graduate Student Travel Grant
2014
NYU GSAS Dean’s Travel Grant
2011
Pass with Distinction in Macro Qualifying Examination
2009
Samsung Scholarship, Tsinghua University
2008
Distinguished Undergraduate Thesis, Fudan University
2006
Dow Chemical Fellowship, Fudan University
2005-2008
People’s Scholarship, Fudan University
Research Papers
Systemic Bank Panics in Financial Networks (Job Market Paper)
This paper embeds panic-based runs in financial markets into the analysis of the fragility of financial
networks. Panics can be contagious when banks are interconnected. During normal times, when banks are
exposed to a fixed distribution of liquidity shocks, but no bank is forced to default, I find a novel
mechanism to show that financial networks with weaker connections (corresponding to a more diversified
pattern of interbank liabilities) will trigger more panics and, in that sense, be more fragile. When one bank
in the network receives a shock that is large enough to make it insolvent, creditors may be uncertain about
the financial linkages between their bank and the initial distressed bank. In such a situation, when a crisis is
underway, I show that information disclosure is likely to trigger more panics from the initial distressed
bank and facilitate financial contagion. In this context, less diversified networks are more sensitive to
creditors' information and beliefs about the initial distressed bank, and could be more fragile. I find that, in
core periphery networks, core banks with higher exposures and more counterparties will face more panics
from their creditors. Moreover, I show that the financial system is more fragile when core banks
intermediate a higher volume of loans with periphery banks.
Diffusing Coordination Risk (with Deepal Basak)
Panic-based bank runs can occur when depositors make their withdrawal decisions simultaneously. By
imposing a withdrawal limit, one can prevent depositors from rushing to withdraw all their funds on one
date. This partitions each individual's decision, thereby inducing a coordination game with dynamic payoff
externalities. The information about whether the bank has survived all withdrawals so far is revealed
publicly. We show that if the withdrawal limit is sufficiently small, depositors ignore their private
information and coordinate on this public news, once they reach the last node. We use a backward
inductive argument to show that depositors who anticipate that nobody will withdraw their funds later do
not withdraw earlier either. Thus, any solvent bank can be made immune to self-fulfilling runs. Moreover,
we show that sufficiently asynchronous debt structures could overcome rollover risk. We formalize this
policy in a dynamic global game of regime change and show that a sufficiently diffused policy unravels the
coordination risk from the end.
Research In Progress
Asymmetric Information, Rollover Risk and Debt Maturity Structure (with Xu Wei, Ho-Mou Wu)
Why were financial institutions so reliant on short-term borrowing before the great recession, thereby
exposing themselves to a significant amount of rollover risk and why did the market of short-term lending
collapse after the recession began? This paper tries to provide an answer to these questions by building a
model of optimal debt maturity with information asymmetry. When outside creditors do not have complete
information about the firms' asset qualities, good firms are willing to borrow short-term debts, because the
extra information released to creditors in the rollover stage could help to distinguish them from bad firms
and thus lower their costs of refinancing. This paper constructs a unique pooling equilibrium with an
optimal mix of short-term and long-term debt, in which the good firms maximize their profits, and bad
firms find it profitable to mimic the good firms. We argue that when the quality of firms' assets starts to
deteriorate (the proportion of good firms diminishes) and creditors become more prudential, firms will first
incur more short-term debts in order to exploit the value of intermediate information. However, when asset
qualities deteriorate further and creditors become very pessimistic, borrowing short-term is too costly and
the short-term borrowing market freezes.
Redemption Gates, Liquidity Fees and Money Market Regulatory Reform
Languages and Computer Skills
English (fluent), Mandarin (native)
Matlab, Stata, R, LaTex and MS Office