Summary:
The book explores the economic phenomenon where services like healthcare and education become increasingly expensive relative to goods like electronics, attributing this to differing productivity growth rates across sectors. It argues that sectors with slower productivity growth, often those requiring personal interaction, face rising costs as they compete for labor with more productive industries, leading to what is termed the "cost disease."
Key points:
1. Baumol's Cost Disease: This concept explains why costs in sectors like healthcare and education rise faster than in tech or manufacturing. Named after economist William J. Baumol, it shows that industries with slower productivity growth have higher cost increases due to wage competition with more productive sectors.
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