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Baumol's Diseases

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  • Jochen Kurt Hartwig

Abstract

Nordhaus (2008) has developed a testing strategy for what he calls 'Baumol's diseases', by which name he designates a number of by-products of structural change that are unwanted from an economic policy perspective. He finds that the U.S. economy is strongly affected by the 'diseases'. This paper applies Nordhaus's testing methodology to Swiss data. The results suggest that - unlike the U.S. - Switzerland is not affected by the most serious of the 'diseases', namely the negative impact of structural change on economic growth.

Suggested Citation

  • Jochen Kurt Hartwig, 2010. "Baumol's Diseases," KOF Working papers 10-250, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:10-250
    DOI: 10.3929/ethz-a-005975828
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    References listed on IDEAS

    as
    1. Jochen Hartwig, 2009. "Trying to assess the quality of macroeconomic data: The case of Swiss labour productivity growth as an example," OECD Journal: Journal of Business Cycle Measurement and Analysis, OECD Publishing, Centre for International Research on Economic Tendency Surveys, vol. 2008(1), pages 37-61.
    2. Hartwig, Jochen, 2008. "What drives health care expenditure?--Baumol's model of 'unbalanced growth' revisited," Journal of Health Economics, Elsevier, vol. 27(3), pages 603-623, May.
    3. repec:bla:kyklos:v:47:y:1994:i:2:p:249-67 is not listed on IDEAS
    4. Pugno, Maurizio, 2006. "The service paradox and endogenous economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 17(1), pages 99-115, January.
    5. Barry P. Bosworth & Jack E. Triplett, 2003. "Productivity measurement issues in services industries: \\"Baumol's disease\\" has been cured," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 23-33.
    6. Jochen Hartwig, 2005. "Sind unsere gesamtwirtschaftlichen Probleme ueberhaupt loesbar?," KOF Working papers 05-112, KOF Swiss Economic Institute, ETH Zurich.
    7. Dennis W. Jansen (ed.), 2006. "The New Economy and Beyond," Books, Edward Elgar Publishing, number 3965, March.
    8. Thijs ten Raa & Ronald Schettkat (ed.), 2001. "The Growth of Service Industries," Books, Edward Elgar Publishing, number 2137, March.
    9. Jochen Hartwig, 2008. "Productivity Growth In Service Industries: Are The Transatlantic Differences Measurement‐Driven?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 494-505, September.
    10. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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    Cited by:

    1. Michael Graff & Massimo Mannino & Michael Siegenthaler, 2014. "The Swiss "Job Miracle"," KOF Working papers 14-368, KOF Swiss Economic Institute, ETH Zurich.
    2. Akinwande Atanda & Andrea Kutinova Menclova & W. Robert Reed, 2018. "Is health care infected by Baumol's cost disease? Test of a new model," Health Economics, John Wiley & Sons, Ltd., vol. 27(5), pages 832-849, May.

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    Keywords

    Baumol's disease; Productivity growth; Switzerland;
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