On 10 April 2026, the Faculty of Finance at the City University of Macau organized the thirteenth Academic Salon at the Golden Dragon Campus. This academic salon invited Dr. Zijian Wang, an assistant professor of Jinan University, as the speaker. He presented his paper titled “Financial Frictions and Rational Inattention”.Dr. Wang is an assistant professor of Institute for Economic and Social Research (IESR), Jinan University. He received his PhD in Economics from​ Bocconi University in 2021. His research interests included information economics, monetary economics and firm dynamics.

The paper studies how financial frictions shape nominal rigidity when firms are rationally inattentive. Using NLP methods applied to U.S. firms’ 10-K filings, the paper shows that financially constrained firms pay significantly less attention to monetary policy. At the same time, within constrained firms, higher leverage is associated with greater attention, consistent with stronger marginal incentives to process information. To interpret these patterns, this paper develops a model featuring firm heterogeneity, rational inattention, and endogenous borrowing constraints. Financial frictions reduce the marginal value of information by limiting firms’ ability to adjust capital, thereby weakening the link between monetary policy signals and real decisions. This generates an endogenous form of nominal rigidity: constrained firms optimally choose to remain inattentive. The resulting feedback loop—where tighter constraints reduce attention, and lower attention amplifies real responses—strengthens the transmission of monetary shocks. Methodologically, the paper proposes a hybrid solution approach that combines frequency-domain and time-domain techniques to solve heterogeneous-agent rational inattention models. The findings highlight attention as an active margin through which financial frictions shape monetary policy transmission.

In this academic salon, Dr. Wang shared his latest research findings with the Faculty of Finance, broadening the academic scope of the faculty. The Faculty of Finance Academic Salon at the City University of Macau is a platform for exchanging academic ideas and enhancing academic awareness. The Salon focuses on finance and economics, inviting experts from academia and the financial industry to discuss cutting-edge research and share industry development trends, aiming to bring new academic experiences and thinking models to the faculty and students of the university. Through academic activities like the academic salon, the Faculty of Finance provides a better academic platform for graduate students and encourage further exploration and research of academic issues among faculty and students.