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Is Cost Disease Really a Sickness? Rethinking “Unbalanced Growth” in the Age of Automation
The great economist Baumol threw out the “cost disease” half a century ago this concept. At that time, the United States was experiencing unprecedented gold growth. However, from government officials to economists to the general public, “cost disease” is full of out-of-context misunderstandings, making it difficult to make a comprehensive and correct diagnosis and treatment. Fortunately, the Chinese version of Baumol’s book “Growing Trouble: Baumol’s Disease and Its Response” was published in time, which may help stop the spread of specious and dangerous perceptions. 1. The essence of cost disease: the trouble of unbalanced growth There is no denying that cost disease is an annoyance. In 1817, it took four…
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Baumol’s Disease: Growing Pains and Hidden Opportunities in the Service Economy
”Baumol’s Disease” is a term coined by American economist William Baumol In the mid-1960s, the concept was proposed when studying the costs and prices of artistic performances to describe the following phenomenon: the costs and prices of artistic performances have been rising, while the costs and prices of other commodities have shown a downward trend. A large number of subsequent studies by Baumol himself and other economists have shown that this is not a special phenomenon, but a general rule that prevails in the service industry, and is true in both developed and developing countries. In fact, many economists, such as Philippe Agion, have dubbed Baumol’s disease “Baumor’s law,” alongside…
