> Why are certain things getting so much more expensive? Alex Tabarrok argues that this is largely do to Baumol cost disease [0]: "rise of salaries in jobs tha

> Why are certain things getting so much more expensive? Alex Tabarrok argues that this is largely do to Baumol cost disease [0]: "rise of salaries in jobs that have experienced no or low increase of labor productivity, in response to rising salaries in other jobs that have experienced higher labor productivity growth". He has a book about it [1] This aligns well with Patrick's graph: healthcare, college, childcare are all labor intensive and have seen little to no productivity increase in the last 23 years. The story for housing is different, though. We are consistently concentrating economic opportunity in the urban centers. However, through NIMBYism, we have made it very difficult to build new housing. The "surprising" result: very expensive housing. Relatedly, Matt Rognlie found out [2] that the increase in the capital share of income since 1970, as noticed by Piketty, can be mostly explained by the housing sector. The solution to both, in my view, are related. We need to reduce barriers for labor movement. We can reduce labor cost by liberalizing immigration to the USA and by liberalizing (re-zoning) and incentivizing (via Land Value Taxation) housing production within the main US urban areas. > Why do there seem to be more examples of rapidly-completed major projects in the past than the present? My suspicion is institutional ossification in the USA. With time we accumulate rules / regulations / procedures that increase the complexity of the task at hand. Eventually, the marginal procedure increases complexity such that our competence is exceeded, making the task impossible. I think the solution is related to his other question "How do you ensure an adequate replacement rate in systems that have no natural way to die?". We should have a way to replace these institutions. Market forces are a great way to do so for private endeavors, startups being the prime example. But for public institutions, it is less clear what could be the proper approach. If there was a way to have states compete for citizens in a non-violent way, that may help. > Why don't we build nice neighborhoods any more? I think it is a mixture of i) survivorship bias (as he suggests), ii) car-oriented development (as he suggests), and iii) the fact that attractive neighborhoods have an organic feel to them that only time can give. Thus, in the car-era we built new neighborhoods but they were car-oriented so they never aged into nice, walking neighborhoods. We are trying to rectify that with new walking-oriented developments, but they have a synthetic feel to them that will only go away with time. > What's going on with infrastructure? I would say this is a combination of the Baumol cost disease and the ossification of our institutions (both mentioned above). [0] https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease [1] https://www.goodreads.com/book/show/46013009-why-are-the-prices-so-damn-high https://www.goodreads.com/book/show/46013009-why-are-the-pri... [2] https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...