Baumol’s cost disease
When productivity rises quickly in some sectors but slowly in others, labor-intensive services become more expensive relative to manufactured or automated goods.
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Plain-language guides to the economic ideas that connect the timeline.
When productivity rises quickly in some sectors but slowly in others, labor-intensive services become more expensive relative to manufactured or automated goods.
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Making a resource more efficient to use can lower its cost, expand its uses, and ultimately increase total consumption.
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As automated goods get cheaper, spending and work may shift toward goods and services where human involvement is part of the value.
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Powerful new technologies can spread rapidly while taking years to produce visible gains in economy-wide productivity.
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When production depends on many complementary steps, improving most of them may do little if one essential step remains hard or unreliable.
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