The economics of toll roads
Charging a toll is a way to pay for the construction and maintenance of a road. In this blog we look at the key risks and returns in a toll road project, from the point of view of potential private … Continued
Infrastructure stories – index page and guide
General posts on infrastructure What is infrastructure and why does it matter? Infrastructure ownership: state or private, does it matter? Infrastructure financing Infrastructure finance: different ways to invest Infrastructure as an asset class Project finance as a way of financing … Continued
A brief history of toll roads
A toll road is a road where access is subject to a fee, called a toll. For this to work, two things need to be in place: i) the road needs to add value compared with other means of transport, … Continued
Project finance as a way of financing infrastructure
Introduction: corporate finance versus project finance The usual way in which a company raises finance to run and grow its business is called corporate finance, where equity investors and debt lenders provide capital to the company as a whole. Most … Continued
Infrastructure ownership: state or private, does it matter?
Infrastructure investment can be done successfully by both state and the private sector, there are plenty of examples of both. In this post we look at the USA and France for examples, some of which contrast with the general view … Continued
How to finance a data centre
Data centres are a new(ish) form of infrastructure investment that because of the sheer scale of AI-related investment are getting a lot of attention. Data centres are not new but what is somewhat new is that they are increasingly be … Continued
Infrastructure as an asset class
The main investors in private sector infrastructure assets are institutional investors, meaning the usually large organisations that mobilise savings from ordinary people and invest them on their behalf. Although currently only a small fraction of their assets goes into infrastructure, … Continued
Infrastructure finance: different ways to invest
In this article we look at the different ways of financing infrastructure. The key point is that there is no single best way of investing in infrastructure, it can be done through the public or private sector and through a … Continued
What is infrastructure and why does it matter?
Summary: Infrastructure means the equipment, assets and processes that allow our normal lives to go smoothly. That includes: the supply of drinking water; the taking away of waste water and sewage; energy supplies; transportation; and communication. These are all services that, at least in richer countries, we rely on daily … Continued
Key finance concepts: What is a corporation?
Ahead of teaching corporate finance each year, I like to try to explain what a corporation actually is. * A corporation is a particular way of organising economic activities. What is called a corporation in the US is called a … Continued
Climate change and finance
Climate change is a systematic risk * In the standard theory of portfolio diversification, we divide risk into systematic and idiosyncratic or diversifiable risk. We argue that idiosyncratic risks can be diversified away, so there is no market reward for … Continued
Multiple causation in history: the case of the Global Financial Crisis
Each year on the Master of Finance core course on Financial Institutions and Markets, I do a session on the Great Financial Crisis of 2007-09. One thing I emphasise is the many different causes of this highly influential event, which … Continued
The case for bitcoin
People are often surprised when they ask economists, what is money, and the reply is, well, anything that fulfills the functions of money is money: money is as money does. The classic definition of money is anything that is: i) … Continued
Some recent books that help explain the world
I see my job as trying to understand what is going on in the world of economics and finance, mainly by reading the research of others, and communicating it as best I can to others. It’s a privilege of my … Continued
What has the world economy ever done for us? – EMBA elective reading 2 (*)
A lot of people in the richer economies appear doubtful that economic globalisation has been good for them. But there are hundreds of millions in the rest of the world for whom globalisation has been a critical part of their … Continued