William Baumol (economist)

William Baumol was an economist known for his work on firm behavior, innovation, and economic growth. He introduced the concept that certain industries, like healthcare and education, tend to have higher costs over time because their productivity growth is slower compared to other sectors like manufacturing. This explains rising costs in these areas despite technological advancements. Baumol’s work highlights how some services are difficult to automate or improve efficiency in, leading to persistent cost increases. His insights help policymakers understand economic dynamics and address issues like inflation and public sector funding.