Baumol's Diseases: A Macroeconomic Perspective

  title={Baumol's Diseases: A Macroeconomic Perspective},
  author={William D. Nordhaus},
  journal={The B.E. Journal of Macroeconomics},
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… 


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Growth of labor productivity (percent per year) 1948 wts 1959 wts 1973 wts

  • 1989