July 22, 2019
Over the last two decades, the prices of consumer goods like toys and electronics have gone way down, but the prices of health care and education have gone up roughly 200%. Why? In this episode, economist Alex Tabarrok discusses his latest book, co-authored with Eric Heller, “Why are the Prices So D*mn High?,” which blames rising costs on a phenomenon called the Baumol Effect.
Links
- “Why are the Prices So D*mn High?” by Alex Tabarrok and Eric Heller
- Alex’s series of posts on Marginal Revolution summarizing the Baumol effect thesis
- Alex’s reply to comments/criticism of his thesis
- Scott Alexander’s post on rising prices and the Baumol effect: “Considerations on Cost Disease”
- … and a follow-up post, “Highlights from the Comments on Cost Disease”
- Scott’s review of Alex’s book
- … and follow-up
- Noah Smith’s column on the Baumol effect