Better broadband – an improvement in aggregate supply?

The government have commented on a number of occasions that the poor broadband speeds experienced by many businesses, especially in rural areas, are limiting productivity and so reducing growth in the level of long run aggregate supply in the economy.  This article from “The Daily Telegraph” suggests that BT is ready to improve broadband speeds around the country.  As a result long run aggregate supply may well be increased.

It is interesting to note, however, that BT has been prompted to undertake this work by the threat of having part of the business, Openreach, made independent.  Therefore, there may be a competition issue here in the long run.


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