Baumol's Cost Disease and the Sustainability of the Welfare State
Bibliographic Data
| ID | 9725709 |
|---|---|
| Authors | Torben M Andersen (0000-0001-5513-1890, Aarhus University, IZA, CESifo and CEPR), Claus Thustrup Kreiner (0000-0001-6421-492X, University of Copenhagen) |
| Year | 2017 |
| Volume | 84 |
| Issue | 335 |
| Pages | 417-429 |
| Publication date | 2017-07-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ecca.12221 |
| OpenAlex | W1571054968 |
| Language | EN |
| Citations received | 5 |
| References cited | 20 |
If productivity increases more slowly for services than for manufactured goods, then services suffer from Baumol's cost disease and tend to become relatively more costly over time. Since the welfare state in all countries is an important supplier of tax financed services, this translates into a financial pressure that seems to leave policymakers with a trilemma: increase tax distortions, cut spending or redistribute less. Under the assumptions underlying Baumol's cost disease, we show that these dismal implications are not warranted. The welfare state is sustainable, and there is even scope for Pareto improvements under Baumol's cost disease
Economics · Goods and services · Macroeconomics · Market economy · Monetary economics · Monetary policy · Operations management · Pareto principle · Productivity · Public economics · Scope (computer science) · Sustainability · Trilemma · Welfare · Climate Change Policy and Economics · Fiscal Policy and Economic Growth · Global Health Care Issues
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| Unique citing works | 5 |
|---|---|
| Citations per year | 0,63 |
| Citation span | 2018 - 2024 (7) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 5 |