TY  - JOUR
AU  - Nordhaus,William D.
TI  - Baumol's Diseases: A Macroeconomic Perspective
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12218
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12218
L1  - http://www.nber.org/papers/w12218.pdf
N1  - Author contact info:
William D. Nordhaus
Yale University, Department of Economics
28 Hillhouse Avenue
Box 208264
New Haven, CT  06520-8264
Tel: 203/432-3598
Fax: 203/432-5779
E-Mail: william.nordhaus@yale.edu
M2  - featured in NBER digest on 2006-05-15
AB  - 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%u2019s 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.
ER  -