
Rationally Speaking #236 - Alex Tabarrok on "Why are the Prices So D*mn High?"
Rationally Speaking Podcast
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What's the Essence of the Bomb?
Wages have gone out by a factor of 25. Productivity hasn't gone up at all, so it must be that prices have gone out as well. If productivity is increasing elsewhere in the economy, that means that's pushing wages up and pushing input costs up. And if productivity isn't going up, prices must rise. So I think it's not surprising that demand for health care has gone up. Maybe education too, there's a good consumption part of education and it's also useful to earn higher wages. It depends on tastes and upon substitutes.
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