Public Roads with Private Money: A Way Ahead


By iMFdirect

When you drive over potholes on downtown streets, are forced to make large detours to cross rivers lacking bridges, and finally arrive to find no cell coverage, connections between the global infrastructure investment gap and your pension fund might not be the immediate thing that comes to mind. But it should, because:

  • Huge pools of available assets: pension funds, insurance companies, mutual funds and sovereign wealth funds sit on $100 trillion in assets. To compare: U.S. nominal GDP in the third quarter of last year was $18 trillion.
  • Huge infrastructure investment gap: between $1 to 1.5 trillion per year worldwide.

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Interest Rates and Investor Decisions: The Long and Short of It


By Erik Oppers

What drives the investment decisions of investors with a longer time horizon? Our research found these investors generally do not look at differences in interest rates among countries when deciding where to invest.

It turns out the factors they do consider in making these decisions are good and stable growth prospects, low country risks—including political and economic stability—and a stable exchange rate. This all makes good sense for long-term investors such as pension funds and insurance companies.

So why all this talk about how low interest rates in advanced economies are “pushing” investment flows to emerging countries, where interest rates are generally higher—is this story wrong? Continue reading

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