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baumol's cost disease (2)

the inescapable disease

Auto workers and police officers will see their wages rise at roughly the same rate in the long run, but if productivity on the assembly line advances while productivity in the patrol car does not, then the cost of police protection will increase – relative to manufacturing.  Over several decades, the two sectors’ differing costs growth rates ad up, making personal services enormously more expensive than manufactured goods (Baumol…

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