GPE Research Cluster with Annina Kaltenbrunner: Liability-driven investment and pension fund exposure to emerging markets: A Minskyan analysis
|Starts:||15:00 13 Feb 2019|
|Ends:||16:30 13 Feb 2019|
|What is it:||Seminar|
|Organiser:||School of Social Sciences|
Please join the GPE Research Cluster for Annina Kaltenbrunner's 'Liability-driven investment and pension fund exposure to emerging markets: A Minskyan analysis'
Annina is Lecturer in the Economics of Globalisation and the International Economy at Leeds University Business School. Her areas of research are development economics, international finance, monetary economics, international political economy, heterodox economics and methodology.
This paper explores the determinants and implications of the growing allocation of insurance companies and pension funds (ICPF) to emerging market assets. The key contention put forward is that in today’s investment environment liabilities are at the core of the portfolio choice mechanism of ICPF, and that this has important consequences for the stability of asset demand. The paper supports this contention with a theoretical framework based on the theory of Hyman Minsky, and the results from 22 semi-structured interviews. It argues that ultimately emerging market assets cannot be used to face institutional investors’ liabilities, which means they are bound to remain part of a return-seeking strategy. This, in turn, causes ICPF’ demand for these assets to be more volatile and often entirely independent of conditions in these countries.
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