Andersen, Torben M.; Kreiner, Claus T. - Economic Policy Research Unit (EPRU), Økonomisk Institut - 2015
If productivity increases more slowly for services than for manufactured goods then services suffer from Baumol’s cost … disease and tend to become relatively more costly over time. Since the welfare state in all countries is an important supplier …; increase taxes (and hence tax distortions), cut spending or redistribute less. Under the assumptions underlying Baumol’s cost …