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Presidential Address: Pension Policy and the Financial System
Author(s) -
SCHARFSTEIN DAVID S.
Publication year - 2018
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/jofi.12710
Subject(s) - pension , variety (cybernetics) , economics , capital market , corporate finance , financial market , pension fund , capital (architecture) , financial capital , pension system , financial system , finance , business , human capital , market economy , archaeology , artificial intelligence , computer science , history
In this paper, I examine the effect of pension policy on the structure of financial systems around the world. In particular, I explore the hypothesis that policies that promote pension savings also promote the development of capital markets. I present a model that endogenizes the extent to which savings are intermediated through banks or capital markets, and derive implications for corporate finance, household finance, banking, and the size of the financial sector. I then present a number of facts that are broadly consistent with the theory and examine a variety of alternative explanations of my findings.