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‘Baumol’s diseases’: The case of Switzerland

Summary

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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Correspondence to Jochen Hartwig.

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I would like to thank Yngve Abrahamsen, Bernd Schips, an anonymous referee, and the editor for their thoughtful comments on earlier versions of this paper. The usual disclaimer applies.

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Open Access This article is distributed under the terms of the Creative Commons Attribution 2.0 International License ( https://creativecommons.org/licenses/by/2.0 ), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Hartwig, J. ‘Baumol’s diseases’: The case of Switzerland. Swiss J Economics Statistics 146, 533–552 (2010). https://doi.org/10.1007/BF03399326

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  • DOI: https://doi.org/10.1007/BF03399326

JEL-Classification

  • C12
  • C23
  • O41
  • O47
  • O52

Keywords

  • Baumol’s disease
  • productivity growth
  • Switzerland