What is the Baumol effect?

In economics, the Baumol effect, also known as Baumol's cost disease, first described by William J. Baumol and William G. Bowen in the 1960s, is the tendency for wages in jobs that have experienced little or no increase in labor productivity to rise in response to rising wages in other jobs that did experience high productivity growth.

Who is will Baumol?

As the Harold Price Professor of Entrepreneurship and academic director of the Stern School’s Berkley Center for Entrepreneurship, Will Baumol did pioneering research on productivity, competition, entrepreneurship, environmental policy, corporate finance, and the economics of the arts.

Who is Baumol & why is he important?

He is the namesake of the Baumol effect . Baumol wrote extensively about labor market and other economic factors that affect the economy. He also made significant contributions to the theory of entrepreneurship and the history of economic thought. He is among the most influential economists in the world according to IDEAS/RePEc.