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Baumol's Diseases: The Case of Switzerland

  • Jochen Hartwig

Nordhaus (2008) has developed a testing strategy for what he calls "Baumol's diseases", by which name he designates a number of by-products of structural change that are unwanted from an economic policy perspective. He finds that the U.S. economy is strongly affected by the "diseases". This paper applies Nordhaus's testing methodology to Swiss data. The results suggest that – unlike the U.S. – Switzerland is not affected by the most serious of the "diseases", namely the negative impact of structural change on economic growth.

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Article provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.

Volume (Year): 146 (2010)
Issue (Month): III (September)
Pages: 533-552

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Handle: RePEc:ses:arsjes:2010-iii-1
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  1. Jochen Hartwig, 2008. "Productivity Growth In Service Industries: Are The Transatlantic Differences Measurement-Driven?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 494-505, 09.
  2. Gundlach, Erich, 1994. "Demand Bias as an Explanation for Structural Change," Kyklos, Wiley Blackwell, vol. 47(2), pages 249-67.
  3. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  4. Jochen Hartwig, 2008. "Trying to assess the quality of macroeconomic data: The case of Swiss labour productivity growth as an example," OECD Journal: Journal of Business Cycle Measurement and Analysis, OECD Publishing,Centre for International Research on Economic Tendency Surveys, vol. 2008(1), pages 37-61.
  5. Jochen Hartwig, 2005. "Sind unsere gesamtwirtschaftlichen Probleme überhaupt lösbar?," KOF Working papers 05-112, KOF Swiss Economic Institute, ETH Zurich.
  6. Pugno, Maurizio, 2006. "The service paradox and endogenous economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 17(1), pages 99-115, January.
  7. Hartwig, Jochen, 2008. "What drives health care expenditure?--Baumol's model of 'unbalanced growth' revisited," Journal of Health Economics, Elsevier, vol. 27(3), pages 603-623, May.
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