Boubaker, Gounopoulos, Nguyen, and Pltalidis (2018) examine the impact of monetary policy on asset allocation decisions made by public pension plans. They show that a prolonged period of low interest rates has a significant effect on these plans, leading to a substantial increase in their alloc...
000 in the bank. The bank has to pay him interest. Therefore, the bank must seek a safe and profitable investment for this amount. It must lend it to somebody. But this amount is not actually paid out to the borrower; it is retained by the...