Diagnosing William Baumol’s cost disease

2020/05/11 wwchu 反思經濟學

https://review.chicagobooth.edu/economics/2017/article/diagnosing-william-baumol-s-cost-disease

The effect now known as Baumol’s Cost Disease is used to explain why prices for the services offered by people-dependent professions with low productivity growth—such as (arguably) education, health care, and the arts—keep going up, even though the amount of goods and services each worker in those industries generates hasn’t necessarily done the same.

“Productivity and price trends are inversely related across industries. It jumps out at you when looking at the data.”