Abstract

http://ssrn.com/abstract=291493
 
 

Citations



 


 



International Pension Swaps


Zvi Bodie


Boston University - Department of Finance & Economics

Robert C. Merton


MIT Sloan School of Management; National Bureau of Economic Research (NBER); Harvard Business School - Finance Unit


Journal of Pension Economics and Finance, Vol. 1, January 2002

Abstract:     
During the past twenty years, swap contracts have become key financial "adapters" linking diverse national financial systems to the global financial network. Today banks and investment companies around the world use swaps extensively to manage their currency, interest-rate, and equity-market risks and to lower their transaction costs. Yet pension funds, which have grown rapidly over that same 20-year period, hardly use swaps at all. This paper suggests how pension funds could use swaps to achieve the risk-sharing benefits of broad international diversification and hedging while avoiding the "flight" of scarce domestic capital to other countries. The paper also shows how swaps can be used to lower the risks of expropriation and to lower the other transaction costs of investing in other countries.

Note: This is a description of the paper and not the actual abstract.

Keywords: Swap, pension fund, international diversification

JEL Classification: F3, G15, G18, G23, K23, K33

Accepted Paper Series


Not Available For Download

Date posted: February 18, 2002  

Suggested Citation

Bodie, Zvi and Merton, Robert C., International Pension Swaps. Journal of Pension Economics and Finance, Vol. 1, January 2002. Available at SSRN: http://ssrn.com/abstract=291493

Contact Information

Zvi Bodie (Contact Author)
Boston University - Department of Finance & Economics ( email )
595 Commonwealth Avenue
Boston, MA 02215
United States
617-353-4160 (Phone)
617-353 6667 (Fax)
HOME PAGE: http://smgnet.bu.edu/mgmt/profiles/BodieZvi.html
Robert C. Merton
MIT Sloan School of Management ( email )
77 Massachusetts Avenue
E62-634
Cambridge, MA 02139-4307
United States
617 715 4866 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-495-6678 (Phone)
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