Publications

- January 1, 2023: Vol. 16, Number 1

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A balancing act: Perspectives on infrastructure, inflation, the energy transition and energy security

by Drew Campbell

Most people remember inflation as a problem of the past, in the 1970s and 80s most recently. Inflation — like infrastructure that keeps the lights on, the water flowing and the traffic moving — has been in the background mostly, managed by policy and in markets, allowing investors to operate since the late 1990s with the expectation of generally low interest rates, low inflation and solid economic growth. That has changed, of course.

The questions on the minds of infrastructure investors are, how long will inflation last, and in what range will it settle? Related to this are energy markets and prices, which make up a large portion of inflation, and debt levels. How we manage the transition to alternatives and the need for energy security, low prices and keeping debt manageable will influence interest rates and inflation, and infrastructure investment performance.

How much price inflation can rate-payers bear? Are traditional energy and infrastructure back in the pi

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