A 2006 macroeconomic analysis of this phenomenon by William Nordhaus demonstrated that it held across multiple industries.
Although the original study that led to the formulation of this concept predicted a growing expenditure gap, the work of Marianne Felton showed that this gap did not materialize in the 1990s. A 2006 macroeconomic analysis of this phenomenon by William Nordhaus demonstrated that it held across multiple industries. In an article explaining why he did not believe in this concept, Tyler Cowen argued that the sector analyzed by this concept's formulators was not "asymptotically stagnant," because both process and product innovations can increase consumption. This concept was originally characterized by its namesake and William Bowen in the work Performing Arts: The Economic Dilemma, which noted that the number of people and the amount of time to perform a Beethoven string quartet has stayed invariant for two hundred years. For 10 points, identify this phenomenon in which salaries for jobs that do not experience productivity gains due to technology or other factors rise anyway along with salaries for jobs that do.
Although the original study that led to the formulation of this concept predicted a growing expenditure gap, the work of Marianne Felton showed that this gap did not materialize in the 1990s.
Baumol effect or "cost disease"