How Has Improved Infrastructure Increase Economic Growth?

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Except creating new travel patterns for people, developed infrastructure increases operational opportunities for firms (Banister D., Berechman J., 1999). There are for example products that have to be transported within few hours and be available at certain radius. Providing firms with new transport options help them to expand and ensure their output is vastly available on the commercial market. Improved infrastructure increases potential output of the factory and makes production more affordable. This reflects on the country’s GDP level. The positive role of infrastructural investments on the national output level has been proved by many studies undertaken in the field. To support the economic growth it is necessary to trigger the productive …show more content…
UK has got one of the highest commuting costs in Europe. According to OECD (2011) report, investments in residential building increases housing supply responsiveness better matching workers with job places. There is a high link between the housing stock, workers mobility and the labour market. To achieve the high level of employment in the economy it is crucial to allow people to relocate to sectors and regions where there is higher demand for their labour. The research made by Flatau et al. (2003) provides surprising evidence that the homeowners with the mortgage are more likely to move than those who do not have that burden. The explanation of that is that the homeowners who have to repay the mortgage have bigger incentives to remain employed and find well-paid job than others. Adding up, the government’s investment will increase the residential mobility what significantly influences the employment prospects in long-term and will lower the unemployment rate. That is another factor important during a period of the post-crisis economic recovery.
From 26 April 2014, with new rules regulating mortgages affordability it is harder for many people to become the homeowner. The rules are to stop lenders from excessive financial overstretching that can result in their inability to repay in case of interest rates rose or their personal circumstances
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Despite the amount of houses built annually dropped, the population growth accelerated. The Office for National Statistics forecasts, with the current immigration level being assumed, an increase by 19% in England and by about 70 million in the entire United Kingdom in the 2010-2035 timeframe (ONS cited by Population Matters, 2014). It clearly shows the necessity of vast investment in affordable housing. That fact puts additional pressure on the government to sustain the right level of public housing investment and ensure there are sufficient incentives for the private

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