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Publication Date:
February 2008
ISSN:
1935-1690
DOI:
10.2202/1935-1690.1382

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Abraham, Arpad / Carceles-Poveda , Eva / Cavalcanti, Tiago / Kambourov, Gueorgui / Lambertini, Luisa / Ruhl, Kim / Tavares, Jose

The B.E. Journal of Macroeconomics

1 Issue per year

IMPACT FACTOR 2011: 0.321

 

Baumol's Diseases: A Macroeconomic Perspective

William D Nordhaus1

1Yale University, william.nordhaus@yale.edu

Citation Information: The B.E. Journal of Macroeconomics. Volume 8, Issue 1, Pages –, ISSN (Online) 1935-1690, DOI: 10.2202/1935-1690.1382, February 2008

Publication History:
Published Online:
2008-02-27

William Baumol and his co-authors have analyzed the impact of differential productivity growth on the health of different sectors and on the overall economy. They argued that technologically stagnant sectors experience above average cost and price increases, take a rising share of national output, and slow aggregate productivity growth. Using industry data for the period 1948-2001, the present study investigates Baumol's diseases for the overall economy. It finds that technologically stagnant sectors clearly have rising relative prices and declining relative real outputs. Additionally, technologically progressive sectors tend to have slower hours and employment growth outside of manufacturing. Finally, sectoral shifts have tended to lower overall productivity growth as the share of stagnant sectors has risen over the second half of the twentieth century.

Keywords: productivity; Baumol disease; inflation

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