The economics of the United Kingdom pension funds
This Thesis examines the nature and role of the pension funds in the United Kingdom, in theory and in practice, from within and without, and from a contemporary and historical perspective. The pension funds are considered via a series of broad surveys, wherein each chapter may be regarded as a complete study of its own. This is necessary to gain the insight into the behaviour of the pension funds and their operational environment that enables a model of their actual behaviour to be accurately constructed. The earlier chapters—Chapters One to Four—examine the institutional context of British pension fund activity, such as their historical development, the role of financial intermediation in general, and the socio-legal environment within which they operate. The middle chapters—Five and Six—provide surveys of the literature on investment portfolio theory and theoretical and empirical studies of British financial intermediation. The latter tend to divide into two distinct approaches, whose relative strengths we consider. Finally, the remaining chapters—Seven through Nine—offer an empirical view of the U. K. pension funds' behaviour over the period 1963 - 1985. Chapter Seven considers the flow of funds through the pension funds, ie sources and uses. Chapter Eight analyses the role of the pension funds in the U. K. capital markets. Chapter Nine suggests a simple econometric model of the investment behaviour of the United Kingdom pension funds based upon the salient features from earlier chapters. In the final chapter we consider what we have learned from the research of the other chapters, consider the implications, and make suggestions for further research in the area.