The Cost Disease: Why Computers Get Cheaper and Health Care Doesn't

By William J. Baumol
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"The Cost Disease" by William J. Baumol provides a comprehensive analysis of the economic phenomenon known as the "cost disease." Examining various industries ranging from healthcare and education to the performing arts, the book explores why costs tend to rise faster in certain sectors compared to others.

Baumol argues that the cost disease arises from the inherent nature of labor-intensive industries, where productivity growth is constrained compared to sectors that have experienced technological advancements. This results in a disproportionate increase in costs, leading to challenges in resource allocation and efficiency.

The author delves into the historical context and examines the consequences of the cost disease on economic growth, income inequality, and public policy. Baumol emphasizes the implications for society as sectors afflicted by the cost disease, such as healthcare and education, play crucial roles in overall well-being and societal advancement.

Through in-depth analysis and compelling research, Baumol offers insights into the cost disease phenomenon and proposes strategies to address its impact. Drawing on economic theory and empirical evidence, the book prompts readers to rethink conventional approaches to managing costs and find innovative solutions to mitigate the effects of the cost disease.

"The Cost Disease" serves as an enlightening resource for economists, policymakers, and anyone interested in understanding the dynamics of rising costs in labor-intensive sectors and its far-reaching implications on society, productivity, and economic development. Baumol's articulate explanations and thought-provoking perspectives present a compelling case for addressing the challenges posed by the cost disease to ensure a sustainable and prosperous future.
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