Resumen

VARGAS, HERNANDO  y  BETANCOURT, YANNETH ROCÍO. PENSION FUND MANAGERS AND THE STRUCTURE OF THE FOREIGN EXCHANGE MARKET. Ens. polit. econ. [online]. 2007, vol.25, n.54, pp.122-155. ISSN 0120-4483.

The effects of the Pension Fund Managers (PFM) behavior on the Foreign Exchange (FX) market may be important, given the size of their portfolio and their possible market power. Some authors argue that when big investors like PFM trade large volumes in the FX market, they may infl uence other agents’ decisions, increasing the impact on the exchange rate. However, when PFM have market power, they will take into account their infl uence on the exchange rate and will moderate their trading volume. This paper seeks to demonstrate the existence of this “mitigating effect” under different theoretical FX market structures.

Palabras clave : pension funds; foreign exchange market; market power.

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