The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World Book 70)

by Robert J. Gordon

“Baumol’s disease,” in which the relative price of the innovation-intensive industries, e.g., the production of computers, declines over time while the relative price of the noninnovative industries, e.g., the playing of a string quartet, increases over time. Baumol’s disease can be cured in some instances, exemplified by how the inventions of phonograph records, tapes, CDs, and MP3s have allowed a single performance of a string quartet to be heard by millions. But some parts of economic activity still exhibit Baumol’s disease without technological relief for rising relative costs, including seats for live performances, college tuition, and medical care expenses.