I recently gave a talk in Mexico on how to deal with the mix of
investments and with risk in an investment based (or mixed) social security
program in emerging market economies.

The special problem in those countries is that equity markets are much
riskier than in the US.

The key idea is to use local bonds combined with a futures contract on the
US or EAFE market

The full paper is available
at http://www.nber.org/feldstein/SocialSecurityInvestmentLA.pdf

Martin Feldstein

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