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Business services and the Baumol disease


  • Henk L.M. Kox


The business services industry represents a large and fast-growing chunk of the Dutch economy, approaching the size of the total manufacturing industry. The industry, however, has displayed stagnating productivity growth, accompanied in some years by a fall in productivity. Do these stylised facts imply that the Dutch economy is inevitably headed for the “Baumol disease”? Investigating this question, this paper reviews policy options that might improve the productivity record of the business services industry and strengthen its contributions to the productivity of client industries.

Suggested Citation

  • Henk L.M. Kox, 2003. "Business services and the Baumol disease," Development and Comp Systems 0309007, EconWPA.
  • Handle: RePEc:wpa:wuwpdc:0309007
    Note: Type of Document - adobe PDF; pages: 6 ; figures: included

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    References listed on IDEAS

    1. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
    2. Antonelli, Cristiano, 2001. "The Microeconomics of Technological Systems," OUP Catalogue, Oxford University Press, number 9780199245536.
    3. Nicolai J. Foss, 1999. "The Use of Knowledge in Firms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(3), pages 458-458, September.
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    More about this item


    business services; impact on macro-economic productivity growth;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • L8 - Industrial Organization - - Industry Studies: Services


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