We propose a normative strategic asset allocation model for long horizon sovereign wealth funds (SWFs) subject to a sustainable spending constraint and background risks. SWFs should have lower stock market exposure as they mature and should use the SWF to smooth business cycle shocks, rather...

From the late 1980s, many countries have reformed the institutional framework governing their central banks to increase operational independence. Collecting systematic biographical information, international press coverage, and independent expert opinions, we find that over the same period...