The Impact of Pension Funds on Capital Markets

David Blake and J. Michael Orszag


Pension fund assets in the UK represent currently about 75% of GDP,
which is one of the highest ratios for the OECD. It is therefore not
surprising that pension funds have an enormous influence on capital
markets, and, in consequence, their actions can affect much of the
wider economy. At the same time, the capital markets have a crucial
role in determining how successful pension funds are in delivering
their pension promise. This article reviews the various consequences
pension funds have for capital markets; in particular, it examines how
pension funds, at least in the U.K., have been accused of short-termism
in their investment strategies.

ISSN 1367-580x.

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