Bryan Caplan and David Henderson

Productivity, Baumol's cost disease

A Category Archive (14 entries)

Tyler Cowen on America's Future

Growth: Consequences
Arnold Kling
He writes, the static sector consists of the protected services (a big chunk of health care, education and government jobs), and the dynamic sector is heavily represented in U.S. exports, often consisting of goods and services rooted in tech, connected... MORE

Some Data to Ponder

Growth: Consequences
Arnold Kling
Michael Mandel writes, We can see that public/quasi-public employment rose steadily over the past ten years, and is now up 16%. By comparison, the rest of the private sector is down 8% in jobs over the past 10 years. He... MORE

The Great Reconfiguration

Labor Market
Arnold Kling
Michael Mandel writes, This first chart shows the change in wage and salary payments by major industry from 2000-2009, adjusted for inflation, using BEA data. We see that healthcare and social assistance generated $210 billion in real wage gains from... MORE

Why is College Expensive?

Economics of Education
Arnold Kling
Robert B. Archibald and David H. Feldman write, First, higher education is a service industry. From 1947 to 2009 the average annual price increase for services was 4.0 percent, while for goods the average annual price increase was only 2.4... MORE

Megan McArdle on Demographics

Productivity, Baumol's cost disease
Arnold Kling
She writes (or will write--It really ticks me off that by the time my Atlantic arrives the best articles have been blogged. Remind me why I pay to get the magazine?) As the Boomers age, they will consume fewer of... MORE

Nobel Prize Speculation

Economic Philosophy
Arnold Kling
Various economics blogs, such as Division of Labour, are speculating on candidates for this year's Nobel Prize in economics. One thing I've noticed is that the winners tend to be people with concepts named after them. Coase theorem. Nash equilibrium.... MORE

Indian Labor Productivity

International Trade
Arnold Kling
I'm at a conference put on by the Milken Institute, and hence the light blogging. At one session on outsourcing and jobs, Clarence Schmitz, the CEO of an outsourcing firm, said that they had anticipated needing 1.2 Indian workers to... MORE

Service Sector Productivity

Productivity, Baumol's cost disease
Arnold Kling
Hal Varian's New York Times column today discusses the apparent rebound in service-sector productivity since around 1995. Before this rebound occurred, there was a fear that service sector productivity growth was inherently slow. Way back in 1967, the noted economist... MORE

Productivity and Unemployment

Productivity, Baumol's cost disease
Arnold Kling
In The Labor Market Puzzle, I sketched a one-sector model in which marginal productivity was falling as average productivity was rising. This would account for a drop in employment along with higher average productivity. Paul Kasriel has a more extended... MORE

Benefits of Health Care Spending

Economics of Health Care
Arnold Kling
Does America spend too much on health care? Has health care been immune to productivity increases and contracted Baumol's cost disease? David Warsh has some answers. "cost disease" is mostly bunk — because it relies on measures of input prices... MORE

Cost Disease and Class War

Productivity, Baumol's cost disease
Arnold Kling
Steve ("econopundit") Antler says that Baumol's Cost Disease is the basis for a new form of class warfare, pitting service producers against goods producers. Much of what's normally called "technical progress" is actually the "iron law" of service pricing in... MORE

Spend Less on Education?

Productivity, Baumol's cost disease
Arnold Kling
Sometimes, an economist argues against conventional wisdom, as in this essay, where I question the view that the government needs to increase its spending on education. If we combine the limited extent to which education is a public good with... MORE

Cost Disease

Productivity, Baumol's cost disease
Arnold Kling
If the government is taking more in taxes than it did forty years ago, then why does the typical citizen not feel that he or she is getting more in services? Kevin Drum proposes an answer. In fact, most of... MORE

The Deficit Argument, III

Productivity, Baumol's cost disease
Arnold Kling
Responding to my previous post, Brad DeLong offers a theory of government spending that is certainly, well, different. one percent faster real GDP growth does not leave federal spending unchanged. A lot of government services require that bureaucrats be paid... MORE

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