Associate Professor Emiliano Pagnotta likes money. More accurately, he likes studying about money. Whether it is analysing the primacy of the US dollar in international trade or the rise of Bitcoin, money is a topic that fascinates the Associate Professor of Finance at LKCSB. Some of the areas he studies include the push towards central bank digital currencies and the movement towards de-dollarisation in international trade. “The dollar has been the de facto currency of choice in post-World War Two global trade,” he noted. “However calls for de-dollarisation have gained momentum after US sanctions on Russia.” No one currency will dominate forever, he pointed out. “Remember that the British pound was the dominant reserve currency for trade in the past.” “The greenback won’t go away, but it will be interesting to look at what a new equilibrium may look like with increasing Chinese hegemony and Bitcoin being touted as a digital and politically-neutral alternative in the face of political misalignments due to trade wars and regional conflicts.” MONEY MAKES THE WORLD GO AROUND, AND ALSO MAKES RESEARCH INTERESTING The question of the US dollar versus the Chinese yuan versus Bitcoin is, in fact, the subject of one of the papers that he is currently working on. His research interests are quite wide though. Some of his past research include analyses of the consequences of speed and fragmentation in financial markets, the use of private information in stock and derivatives markets, and an examination into how to determine the value of Bitcoin and other blockchain assets. His research is regularly presented in leading academic and professional conferences and published in academic journals such as Econometrica, The Journal of Finance, and The Review of Financial Studies. One of the topics he is now examining relates to insider trading. He is currently co-authoring an upcoming paper titled “Legal Risk and Insider Trading”. Regulators assume their regulations work but traders are more cynical and believe that the risks are worth it as the huge gains over time are large enough to cover the occasional penalties, he said. He noted that traders can trade using insider information all the time during their career. They might be caught once or twice but at that point, they hope to settle things with a fine from the regulators. He said that at present, there are a lot of grey areas that can be exploited for outsized gains. “The lack of concrete evidence on whether insider trading regulations deter crime convinced us to embark on this project.” It is a topic that presents a host of enormous challenges though. The raw data is not only voluminous but also hard to gather, even when using artificial intelligence, due in part to the complex legal language and different jurisdictions involved in the research. It may be a tough subject to study but he relishes the challenge. “Being able to think and contribute to answers for complex and difficult questions is what drives me,” he said. “That’s why I chose academia as a career.” After obtaining his licentiate from the Universidad de Buenos Aires in 2002, he received a Masters in Economics from Universidad de San Andres (in Argentina) in 2003. This was followed by another Masters in Economics in 2005, this time from Northwestern University in the US, which is also where he obtained his PhD four years later. INTERVIEW WITH EMILIANO PAGNOTTA LEE KONG CHIAN SCHOOL OF BUSINESS YEAR IN REVIEW 2022 - 2023 70
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