William Jack Baumol (born February 26, 1922) is a New York University economics professor (although he is also affiliated with Princeton University) who has written extensively about labor market and other economic factors that affect the economy. He also made valuable contributions to the history of economic thought. He is among the 500 best economists in the world according to IDEAS/RePEc. Among his better-known contributions are the theory of contestable markets, the Baumol-Tobin model of transactions demand for money, Baumol’s cost disease, which discusses the rising costs associated with service industries, and Pigou taxes [Baumol, W.J. (1972), ‘On Taxation and the Control of Externalities’, American Economic Review, 62 (3), 307-322]. The 2006 Annual Meetings of the American Economic Association held a special session in his name, and honoring his many years of work, where 12 papers on entrepreneurship were presented (AEA Annual Meeting Papers). The British magazine, The Economist published an article about William Baumol and his lifelong work to develop a place in economic theory for the entrepreneur (March 11, 2006, pp 68), much of which owes its genesis to Joseph Schumpeter. They note that traditional microeconomic theory holds a place for ‘prices’ and ‘firms’ but not for that (seemingly) important engine of innovation, the entrepreneur. Baumol is given credit for helping to remedy this shortcoming: Thanks to Mr. Baumol’s own painstaking efforts, economists now have a bit more room for entrepreneurs in their theories. Baumol is a trustee of the Economists for Peace and Security … (full long text).
William Jack Baumol – USA
His Video: William Baumol, conversation with Harold Channer, originally aired 06-12-99, 59 min, added on web March 19, 2008.
He says: … “It is true that in money terms our productivity will be slowed down by the shift in labor from agriculture, manufacturing and services like telecommunications into services like health care and education, but if you count the number of students who have graduated or the number of people who have been taken care of after a heart malfunction, that is not going down” … (full text, August 13, 2007).
Absurd remedies to cost disease.
… When Mozart composed his String Quintet in G Minor (K. 516), in 1787, you needed five people to perform it—two violinists, two violists, and a cellist. Today, you still need five people, and, unless they play really fast, they take about as long to perform it as musicians did two centuries ago. So much for progress. An economist would say that the productivity of classical musicians has not improved over time, and in this regard the musicians aren’t alone. In a number of industries, workers produce about as much per hour as they did a decade or two ago. The average college professor can’t grade papers or give lectures any faster today than he did in the early nineties. It takes a waiter just as long to serve a meal, and a car-repair guy just as long to fix a radiator hose. The rest of the American economy functions differently … The result is that in industries where productivity is flat costs and prices keep going up. Economists call this phenomenon “Baumol’s cost disease” … (full text, July 7, 2003).
Find his CV/Bio: on his own homepage at econ.nyu.edu; on Pioneers of Industrial Organization; on all biographies.com; encyclopedia.farles.com … etc etc …
William Baumol and his co-authors have analyzed the impact of differential productivity growth on the health of different sectors and on the overall economy. They argued that technologically stagnant sectors experience above average cost and price increases, take a rising share of national output, and slow aggregate productivity growth. Using industry data for the period 1948-2001, the present study investigates Baumol’s diseases for the overall economy … (full text).