Rebecca Patterson's recent New York Times essay uses a Jenga tower as a metaphor for the American economy in 2025. Blocks are being removed—small businesses cutting jobs, federal layoffs, consumption concentrating among the wealthy—while AI companies pile massive investments on top. Eventually, she warns, Jenga towers fall down. She's right about the instability. But the … Continue reading When the Tower Can’t Be Rebuilt: What Institutional Economics Misses About the Next Decade
Tag: economics
Baumol Effect or Baumol’s Cost Disease
"In economics, the Baumol effect, also known as Baumol's cost disease, first described by William J. Baumol and William G. Bowen in the 1960s, is the tendency for wages in jobs that have experienced little or no increase in labor productivity to rise in response to rising wages in other jobs that did experience high productivity growth."
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