I haven't read Baumol on this point but it seems as fatuous as some of his other stuff. Does he mean that people, having money left over after they buy all the cheap produced goods that they want, will spend so much on labor intensive services that there will be a shortage of workers, thus driving wages up? A shortage of gardeners? Hospital attendants? Janitors? I'll be watching for the spike in wages. Haven't seen it yet.
Gene Coyle
Michael Hoover wrote:
according to william baumol, declining prices for produced goods in a 'high-tech' economy will - at some point - cause wages in labor-intensive services to increase...
is above correct formulation, if not, what is... is baumol's disease an economic 'law'...
thanks in advance for comments... michael hoover
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