In a recent paper I argued that Baumol's (1967) model of "unbalanced growth" offers a ready explanation for the observed secular rise in health care expenditure (HCE) in rich countries (HARTWIG 2006). Baumol's model implies that HCE is driven by wage increases in excess of productivity growth. I...

A large body of both theoretical and empirical literature has affirmed a positive impact of human capital accumulation in the form of health on economic growth. Yet Baumol (1967) has presented a model in which imbalances in productivity growth between a "progressive" (manufacturing) sector and a...

The share of health care expenditure in GDP rises rapidly in virtually all OECD countries, causing increasing concern among politicians and the general public. Yet, economists have to date failed to reach an agreement on what the main determinants of this development are. This paper revisits...

Against the backdrop of Baumol's model of "unbalanced growth", a recent strand of literature has presented models that manage to reconcile structural change with Kaldor's "stylized fact" of the relative constancy of per-capita GDP growth. Another strand of literature goes beyond this, arguing...