A real estate sector drives economic growth

A real estate sector drives economic growth


10/26/2014 0:00 


Ryan Avent, Born * Torgomh- Khalid Qasim 
consists of a large part of the growth of the wealth of the current rise in real estate values ​​as the French economist, says, "Thomas Bikiti." The prices of the housing boom in the past two decades, and the largest increases occurred in affluent cities such as London, New York and San Francisco. 
increase in house prices is a reaction to an imbalance between supply and demand, as the globalization of economies affected demand. With the start of the decline in transportation costs at the beginning of the twentieth century, left a lot of manufacturing companies gathered in the cities of developing countries in search of land and cheaper labor forces. This led to the exposure of these cities to the crisis due to the collapse of the tax base and the deterioration of public services, what precipitated the exodus. 
found economic "Ed Glesr" from Harvard University relationship between city size and productivity per worker, but only in the areas of manpower is very skilled. While economists pointed from the University, "Lund" that the new jobs since the eighties become a knowledge nature more, and linked the revolution of information and communication and fast growing technology in cities that has workers highly skilled owners. restrictive laws have seen many cities since the beginning of the nineteenth century to impose broad packages of laws the division of land is the latest big leaps in house prices in the attractive cities. Most major cities suffer from excessive housing prices, which represents the "shadow tax" on the new organizational structure. In fact, most of the value of real estate in cities such as London and New York reflects the difficulty of building new homes. So even with the increasing importance of the big, high economies of skill but they are not available only to the rich, what stimulates the migration away from the most vital areas economically toward areas that offer good jobs and grant cut land for construction. the difference in construction costs due to the different attitudes towards construction. Economic impact to keep tight lid on building houses a stunning effect. Guess economic "Enrico Moretti," from the University of California, employment multiplier for various types of work in his book "The New geographical positions," published in 2012. It is believed that the new job in manufacturing creates 1.6 new jobs in the local service economy. The innovative industries in the new office is used to generate four to five new jobs in the services sector in major cities. But house prices are impeding the growth of non-balanced this effect. monopoly gains all this has a negative impact in developed countries on employment and productivity and production. And find research prepared Moretti that production in the United States between 1964 and 2009 has declined by 13 percent from the normal level because of high housing costs have encouraged people to migrate. This is excellent news for homeowners in London, New York and San Francisco as long as they are planning to sell in one day. Means housing costs prohibitive that most gains create the new jobs will go to the land owners (or residents leaving her homeowners) and not the workers or employers. Technology has led to increased yield accommodation in high-skill cities, but they did not do anything to facilitate finding a home there. * British Economist magazine

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