Time: 10:00, 2 December 2025
Speaker: Zhao Zhang is an economist at the International Monetary Fund. His research fields include macro-finance, financial intermediation, and labor finance. At the IMF, he has worked in the European Department and the Research Department, participating in the World Economic Outlook and macroeconomic policy consultations for Switzerland and Ireland. He received his PhD from the Marshall School of Business at the University of Southern California.
Abstract:
Lower interest rates raise firms' growth incentives, increasing demand for input factors such as commercial real estate. When factor supply is inelastic, rising factor costs can dampen growth. We show that this factor cost channel creates geographic heterogeneity in industry responses to interest rate changes. Using within-county variation across zip codes, we find that falling rates cause larger commercial real estate price increases but smaller employment gains in areas where industries are more interest rate-sensitive. These effects are stronger where land supply is inelastic and are not explained by local demand or collateral channels.
