Baumol effect vs Jevons paradox

post by Hzn · 2025-02-10T08:28:05.982Z · LW · GW · 0 comments

This is a link post for https://hzn33.neocities.org/econ1

Contents

No comments

Key points. The Baumol effect & Jevons paradox are 2 claims regarding the effect of increasing efficiency of a good or sector. Although not incompatible, they are at odds; one suggesting relative decline, the other suggesting absolute growth. I examine these & find that they are often defined & discussed in a confused way. I suggest that thinking in terms of sector specific ‘Kondratiev waves’ may be more helpful. This suggests a boom for AI but a bust for non AI software with the former overwhelming the latter as far as effect on the overall economy.

0 comments

Comments sorted by top scores.