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Baumol's cost disease

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Baumol's cost disease (or the Baumol effect) is the rise of salaries in jobs that have experienced no or low increase of labor productivity, in response to rising salaries in other jobs that have experienced higher labor productivity growth. The phenomenon was described by William J. Baumol and William G. Bowen in the 1960s and is an example of cross elasticity of demand.

Baumol effect - Wikipedia Jump to content From Wikipedia, the free encyclopedia (Redirected from Baumol's cost disease ) Rise of salaries in jobs that have seen little rise of productivity As the Baumol effect predicts, between 1998 and 2018, services became more expensive while many manufactured goods became cheaper. Note the modest increase in average wages in the middle. In economics , the Baumol effect , or Baumol's cost disease , first described by William J. Baumol and William G. Bowen in the 1960s, is the tendency for wages in jobs that have experienced little or no increase in lab

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