Which St.Gallen professor sat next to Stephen Hawking on the first day of her PhD, which professor’s hero or heroine is not a celebrity but rather an ordinary person doing volunteer work for society or the environment. Learn more in our interview with some of the St. Gallen faculty members below.

Prof. Andrea Barbon

What research are you working on right now that you are really excited about and why?

I am currently doing research on Decentralized Finance (DeFi), focusing on decentralized exchanges, lending platforms, and NFT marketplaces. These new providers of financial services have experienced a strong growth in adoption over the last year and deserve attention from academic researchers. What makes me most excited is the incredible availability of data—accessible from public blockchains—recording every transaction with unique wallet identifiers. I believe that such a granularity of information will allow researchers to shed new light on the complex socio-economic dynamics driving the activity in financial markets and determining asset prices.

Prof. Alexander Braun

What research are you working on right now that you are really excited about and why?
Together with two co-authors, I am currently investigating the asset pricing implications of atmospheric natural disasters. More specifically, we provide empirical evidence that hurricane risk has become a systematic risk factor in the US stock market during the last 20 to 25 years. In this very time period, normalized economic losses from hurricanes were almost double as high than in the decades before. This is likely attributable to warmer sea surface temperatures and urban sprawl into disaster-prone areas. In addition, supply chains are much more densely integrated than ever before. Accordingly, households and companies can be economically impacted by hurricanes, even if they are located geographically far away from the counties where the hurricane made landfall. Our evidence points to an economically and statistically significant hurricane risk premium of up to nine percent p.a. I am excited about this project, because it is another indication for the convergence of insurance risks and capital markets. It is also closely linked to the rapidly growing climate finance literature, documenting the impact that climate risks can exhibit on firm’s cost of capital. 

Prof. Christian Keuschnigg

Any anecdote or memory from your time as PhD?
My PhD was decades ago. PhD education was then not at the level of today’s standards. There was quite some trial and error. My enthusiasm made me learn from mistakes and repeat successful work. The first publications were hugely motivating (the rejections less so). I visited some leading universities as a guest student which proved to be invaluable for my career path. 

What research are you working on right now that you are really excited about and why?
My current interest is very much in the role of finance as a driver of creative destruction. Venture capital and private equity must finance new firms with huge growth prospects, with banks providing additional lending. Banks must also cut off credit lines to old firms when they have become unprofitable. They must avoid ‘zombie’ lending that locks in capital and prevents resources to flow to more productive uses. Both types of financial institutions thus play a complementary role in financing innovation and structural change. 

Has the COVID pandemic had any effect on your research focus?
Yes, indeed. I have written a paper on what would be a good strategy to consolidate the large fiscal Covid debt. Is it possible for a country to grow out of the Covid debt, rather than raise distorting taxes and cut valuable spending? It should be possible if consolidation is coupled with efficiency improving tax and spending reform. 
I am currently working on a project of how to speed up recovery from the Covid crisis. Firms have lost a lot of equity capital which they must fill up again to keep growing. Equity is a precondition for further credit financing. Most equity comes from retained earnings which is a very slow process. If firms had better access to external equity markets, they could raise equity in big chunks and very fast which could speed up the recovery. Insights from this research should be relevant not only for the Covid recovery, but for recovery from any financial crisis. 

Tell us something exciting that happened to you in the last five years? It doesn’t have to be related to your research work.
Professionally, I reoriented my research program to model in more detail the role of finance in macroeconomic growth and economic fluctuations and have developed DSGE models in that direction. I have high hopes that this will bear academic fruits in the next years. In the private sphere, the most exciting experience is to observe the studies of our twin girls, one in law and the other in accounting and finance. It is exciting to observe their choices. My biggest challenge is to abstain from giving too much advice!

Who is your all-time hero or heroine and why?
There are too many, young and old. I easily get excited about achievements of other people: ambitious students, my daughters, and the most successful professionals. I generally admire when people are not only narrowly focussed on their own success but aim to contribute to society and the common good.

Prof. Winfried Koeniger

Any anecdote or memory from your time as PhD? 
Table football in the Bar Fiasco.

What research are you working on right now that you are really excited about and why?
At the moment I am particularly interested in the intertemporal trade-offs that arise when considering the effect of macroeconomic policy on household portfolios. Why? Because more granular data allow to test new mechanisms and discipline dynamic, quantitative models more credibly so that we better understand these trade-offs.

Has the COVID pandemic had any effect on your research focus?
Although it has not changed my focus, I try to exploit the big shock scientifically in some research projects, for example to investigate the consequences for financial markets and socio-economic behavior. 

Tell us something exciting that happened to you in the last five years? It doesn’t have to be related to your research work.
Discussions about research with my colleagues and collaborators. 

Who is your all-time hero or heroine and why?
Mahatma Gandhi who showed us how much can be achieved in a peaceful way. 

Prof. Ola Mahmoud

Any anecdote or memory from your time as PhD?
On my very first day of the PhD, I sat next to Stephen Hawking over lunch.

What research are you working on right now that you are really excited about and why?
I am trying to understand the macroeconomic effects of sustainable finance, in particular its impact on important social issues such as inequality and poverty. 

Tell us something exciting that happened to you in the last five years? It doesn’t have to be related to your research work.
My discovery of endurance sports.

Prof. Angelo Ranaldo

Any anecdote or memory from your time as PhD?
The most inspiring time of my PhD was when I visited New York University School of Business for a year through SNSF funding as a visiting scholar.

What research are you working on right now that you are really excited about and why?
The focus of my research has always been the “frictions “or inefficiencies of the financial system. The visible part of the iceberg of all frictions is the market liquidity and asset prices that do not reflect their true fundamental value. My current research projects shed light on these issues especially with regard to fiat and digital currencies.

Has the COVID pandemic had any effect on your research focus?
Not so much aside from the fact that the referrals with my authors as well as the classes were all conducted online.

Tell us something exciting that happened to you in the last five years?
It doesn’t have to be related to your research work.
I enjoy playing sports. In the last few years I have started playing tennis and I really enjoy it.

Who is your all-time hero or heroine and why?
My hero is not a celebrity but rather an ordinary person working for something useful for society and the environment.

Prof. Matthias Weber

What research are you working on right now that you are really excited about and why?
In a current research project, Immanuel Lampe (a former PhD student at the University of St. Gallen) and I work on an important question of decision theory and behavioral finance. The most famous theory of behavioral economics and behavioral finance is Prospect Theory (for which Daniel Kahneman received the Nobel Memorial Prize in Economic Sciences). This theory describes how people make decisions when payoffs are risky. Prospect Theory is very well understood when all payoffs arise in one point in time. Surprisingly, little is known about how to apply this theory when outcomes arise in different points in time, as in so many situations in economic and financial life. If you want to know how to apply it in such situations, check out our working paper "Intertemporal Prospect Theory"…