Georg Duernecker, Berthold Herrendorf, Akos Valentinyi, 16 May 2018

Baumol argued that structural change may lead to a productivity slowdown due to a reallocation of production to service industries with low productivity growth. This column uses a new framework to estimate the effects of Baumol’s disease on future productivity growth in the US. The results suggest that future structural change will not reduce productivity much further thanks to substitutability within the broader service sector.


The Asian Development Bank Institute (ADBI) invites submissions of unpublished papers that focus on structural transformation and inclusive growth. Both theoretical and empirical research papers with policy orientation are welcome provided that findings, conclusions, and policy recommendations are based on solid evidence and analysis.

Manuscripts can focus on a group of countries, or individual economies.

The papers should be related to, though not limited to, one of the following topics:

Growth decomposition across the income quantiles1
Structural transformation and growth incidence2
Structural transformation and income inequality
Future of the Kuznets Curve hypothesis3
Structural transformation and livelihood diversification


CEPR Policy Research