Research On The Interactive Relationship Between Pension Fund And Capital Market

As the core component of social security system,pension fund has been fully developed since William Beveridge,a famous British economist,put forward the idea of comprehensive social security from cradle to grave.Countries have set up pension funds as an economic guarantee for their citizens to maintain their living standards in their old age.However,with the interweaving of pension funds with many social and economic factors,pension funds are not only endowed with social and political functions,but also with economic expectations such as promoting economic development and optimizing employment structure.Pension funds have also become an important indicator reflecting the overall economic and social development of a country.Overall,the continued ageing of the population structure in the world's major countries means that pension funds will dry up in the coming decades.In order to meet the requirements of maintaining and increasing the value of pension funds,along with the rapid development of capital markets in various countries,major countries gradually relaxed the investment restrictions on pension funds,pension fund has become an important institutional investor in the capital market.Pension funds have savings effect,liquidity effect,interest rate effect and stability effect on the development of capital market,while the development of capital market has economic growth effect,investment income effect,financial accelerator effect and network effect on pension funds.However,due to the different development situations of pension funds and capital market in different countries,the interaction between pension funds and capital market development is also different.This paper first USES granger causality test to explore the interaction between pension funds and capital markets in various countries.The results show that the causal relationship between pension funds and capital market development is uncertain.In order to further explore the uncertain factors,this paper is divided into two parts,it USES the PVAR model empirical analysis of pension funds for capital market have significant impact on the development scale and volatility,results show that the pension fund scale expansion no significant effect on the capital market,and has a significant influence on capital market volatility is.Through the comparative analysis of the development and interaction between pension funds and capital markets in various countries,this paper finds that there is no inevitable connection between pension funds and the development of capital markets,and there are restricting factors in the interaction between them.The investment subject,investment strategy,supervision mode,investment risk compensation mechanism and pension fund drawing form of pension fund all affect the interactive relationship between pension fund and the development of capital market.This paper holds that in order to realize the positive interaction between China's pension fund and the development of the capital market,China should accelerate the improvement of the pension insurance system,deepen the reform of the capital market,establish diversified investment strategies and professional pension insurance investment institutions,and continuously improve the investment risk prevention and control system.