Education in the lead by length and Medical Closing in: The Changing Structure of Prices since 1960



  • Baumol’s disease will carry you only so far in dealing with the rapid rise in education.
  • The medical care fact is not nearly as striking in the CPI as it seems to be in the overall spending data—and the medical care fact is, in any event, somewhat dubious when quality adjusted.

Baumol’s disease would basically say that labor costs go up as labor become more productivity in other productive activity, but not for a particular industry, such as medical care.  I think you could read all this as saying we have more of an education crisis in lack of gains in productivity than for medical care.

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