Entrepreneurship Trends Comments The papers in this section consider trends in entrepreneurial activity, both in the United States and internationally.
Posted on February 17, by Scott Alexander I got many good responses to my Considerations On Cost Disease post, both in the comments and elsewhere. A lot of people thought the explanation was obvious; unfortunately, they all disagreed on what the obvious explanation was.
Below are some of the responses I found most interesting. So, what is really happening? I think Scott nearly gets there.
Things cost 10 times as much, 10 times more than they used to and 10 times more than in other countries. So where is it going? The number of people it takes to produce these goods is skyrocketing. Labor productivity — number of people per quality adjusted output — declined by a factor of 10 in these areas.
It pretty much has to be that: How can that happen? Our machines are better than ever, as Scott points out. Well, we and especially we economists pay too much attention to snazzy gadgets.
Productivity depends on organizations not just on gadgets. Southwest figured out how to turn an airplane around in 20 minutes, and it still takes United an hour.
Contrariwise, I think we know where the extra people are. Most large public school systems spend more than half their budget on administrators. Construction sites have always had a lot of people standing around for every one actually working the machine.
But now for every person operating the machine there is an army of planners, regulators, lawyers, administrative staff, consultants and so on.
I welcome pointers to good graphs and numbers on this sort of thing. So, my bottom line: Well, how does bloat come about?
Regulations and law are, as Scott mentions, part of the problem.
These are all areas either run by the government or with large government involvement. But the real key is, I think lack of competition. These are above all areas with not much competition. The main effect of our regulatory and legal system is not so much to directly raise costs, as it is to lessen competition that is often its purpose.
The lack of competition leads to the cost disease. Everywhere we see businesses protected from competition, especially highly regulated businesses, we see the cost disease spreading.
And it spreads largely by forcing companies to hire loads of useless people.Free Online Library: Money growth, output growth, and inflation: estimation of a modern quantity theory. by "Southern Economic Journal"; Business Economics Money growth, output growth, and inflation: estimation of a modern quantity theory.
Link/Page Citation A country's long-run rate of real economic growth is independent of its money. Economic Journal Lecture: Maristella Botticini (Bocconi) "Nature or Nurture?
Jewish Child Care and Population Growth in Eastern and Central Europe, ". To access the updated Vendor Information Pages(VIP) you must select one of the options available through AccessVA Login: Veteran Small Business Owners: DS Login: Veterans (including Veterans Small Business Owners (Veteran Owned Small Business (VOSB) or Service Disabled Veteran Owned Small Business (SDVOSB) or their business representatives who are also Veterans.
The economic growth model explains growth in real gdp per capita in the long run. because of the importance of labor productivity in explaining economic growth, the economic growth model focuses on the causes of increases in long-run labor productivity. what are the key factors that determine labor productivity?
The term labor quantity.
The extent of union influence is reflected in the trend or real wages for teachers; between and real wages for teachers grew at an annual rate of 5 percent compared to a real growth rate of 3 percent per year of GDP per capita. Labor Market Equilibrium and Wage Determinants.
the y-axis is the marginal product/wage rate, and the x-axis is the quantity of labor. slowing the growth of the labor force and promoting policies that make it difficult for workers to enter a particular craft. Key Terms.