All of these activities make financial markets more complete, and thus enhance their efficiency. But how do defined-benefit plans aid employers? They can serve as a powerful tool for attracting and retaining staff. And, if they function well, defined-benefit plans can eliminate the risk of employees retiring with very low incomes.
We would not, for example, have expected much effect through the second quarter and only a modest effect in the second half, based on past experience and the forecasts of our models. But other factors, too, have contributed to the perception that monetary policy is less effective.