William J. Baumol

William J. Baumol is Professor of Economics at New York University and Director of the university's C. V. Starr Center for Applied Economics.

  • Global Trade and Conflicting National Interests

    Global Trade and Conflicting National Interests

    Ralph E. Gomory and William J. Baumol

    Ralph Gomory and William Baumol adapt classical trade models to the modern world economy.

    In this book Ralph Gomory and William Baumol adapt classical trade models to the modern world economy. Trade today is dominated by manufactured goods, rapidly moving technology, and huge firms that benefit from economies of scale. This is very different from the largely agricultural world in which the classical theories originated. Gomory and Baumol show that the new and significant conflicts resulting from international trade are inherent in modern economies.Today improvement in one country's productive capabilities is often attainable only at the expense of another country's general welfare. The authors describe why and when this is so and why, in a modern free-trade environment, a country might have a vital stake in the competitive strength of its industries.

    • Hardcover $9.95 £7.99
  • Assessing Educational Practices

    The Contribution of Economics

    William J. Baumol and William E. Becker

    Assessing Educational Practices introduces the nonspecialist to the research methods used by economists in studies of education practices and the institutions and markets in which education takes place.

    Assessing Educational Practices introduces the nonspecialist to the research methods used by economists in studies of education practices and the institutions and markets in which education takes place. The ten chapters, all commissioned for this book, explain the way economists think about teachers' salaries, student achievement, class size, school organization, and other subjects of current debate in education. Each author demonstrates how methods used in economics can be applied to measure the success and failures of educational practices.

    All the contributions focus on precollege education and the discussion is largely based on the United States experience. One chapter looks at teaching in the United Kingdom, and another at international comparisons of incentives and student performance. Other topics include the effect of school quality on students' future earnings, merit pay for teachers, school spending and budgets, the relationship between competition and school quality, and proposals to improve secondary schools.

    Contributors Masato Aoki, William J. Baumol, William E. Becker, John H. Bishop, David Card, Elchanan Cohn, Peter Dolton, Susan F. Feiner, Rendigs Fels, Frederick Flyer, Alan B. Krueger, Charles R. Link, James G. Mulligan, Sherwin Rosen, Wilbert van der Klaauw

    Copublished with the Russell Sage Foundation.

    • Hardcover $52.00 £35.95
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  • Entrepreneurship, Management, and the Structure of Payoffs

    Entrepreneurship, Management, and the Structure of Payoffs

    William J. Baumol

    Baumol studies the effect of the allocation of entrepreneurs between productive and unproductive activities on an economy's performance.

    Although it is admittedly difficult to theorize and make predictions on the innovative behavior and supply of entrepreneurs, William Baumol shows that by usually failing to incorporate entrepreneurship in their growth models, economists have omitted what can be a key contributor to economic growth. In this book Baumol seeks to bring entrepreneurship back into the body of mainstream economic theory. In particular, he studies the effect of the allocation of entrepreneurs between productive and unproductive activities on an economy's performance. Departing from the orthodox view that imitation retards technical progress by reducing the reward to innovation, Baumol asserts that entrepreneurs can spread and speed the adoption of new technology and ideas throughout a market. By persistently looking to depart from standard practices, entrepreneurs fuel change and help keep an economy from falling into a rut. Often these changes can improve efficiency, increase production, and spur growth. Baumol points out, however, that entrepreneurs do not always, or even usually, behave productively. He devotes several chapters to different types of misallocation of entrepreneurship, such as the mergers and acquisitions of the 1980s and frivolous lawsuits examples of the ways an entrepreneur will find to increase his or her share of the profits rather than produce more. Therefore, Baumol argues, it is important to the vitality of a free-enterprise society to provide incentives for making better use of entrepreneurial resources, and he suggests relevant changes in economic institutions.

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  • Toward Competition in Local Telephony

    William J. Baumol and J. Gregory Sidak

    Local telephone companies have long been extensively regulated as natural monopolies. Technological innovation and the prospect for lifting regulatory barriers to entry, however, now expose at least some portions of the local exchange to competition from cable television systems, wireless telephony, and rival wireline systems. William Baumol and Gregory Sidak examine how telecommunications regulation can be designed to adapt automatically as the market becomes increasingly competitive and ask, if certain parts of local telephony remain naturally monopolistic, how can regulators protect consumers against cross-subsidy, predatory pricing, and price discrimination? How should a local exchange carrier that is a natural monopoly in some activities be permitted to price necessary inputs it sells to its competitors in the market for the final telecommunications products? The economic analysis that the authors employ to answer these questions can apply to any network industry.

    Effective June 1, 1998, The MIT Press no longer distributes titles for the AEI Press. Orders for this book should be placed with: AEI Pressc/o Publishers Resources, Inc. 1224 Heil Quaker Blvd.P.O. Box 7001La Vergne, TN 37086-7001

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  • Microtheory

    Applications and Origins

    William J. Baumol

    This volume of seventeen previously published essays by William J. Baumol brings together work on the theory of contestable markets, welfare theory, antitrust, pricing, and the history of economic thought. Written between 1971 and 1983, they have sparked productive extensions and criticism in microeconomic theory and provide an engaging intellectual history of one of the leading figures in the field of economics. Baumol introduces each of the book's four parts, presenting his subsequent views on the subjects covered in the reprinted articles, including some important amendments.The book opens with an autobiographical essay that presents the intellectual climate of economics in the 1940s in which Kenneth Arrow, Frank Hahn, Martin Shubik, Otto Eckstein, and Gary Becker were beginning their careers. Baumol's introductory essays to the book's major sections take up the threads from this autobiographical piece and follow them to the development of concepts central to economic theory, applications, and methodology. Three essays in the first part provide an underpinning for the theory of contestable markets. In the second part five essays explore issues in welfare economics such as the role of diminishing and increasing returns may play the role of symmetric obstacles to Pareto optimality. Essays in the third part range from regulation and antitrust to urban economics to the Phillips curve and the pitfalls of using, in the analysis of real issues, dual values derived from linear models when the underlying reality is nonlinear. Those in the concluding part focus on the history of economic ideas such as the Smithian versus Marxian view of business morality and the social interest, the Marxian concept of value transformation, the iron law of wages, and Say's law.

    • Hardcover $12.75 £9.50
  • Superfairness


    Applications and Theory

    William J. Baumol

    With his characteristic acuteness and lucidity, William Baumol, one of America's foremost economists, tackles the problem of equity considerations in welfare economics by applying the novel "superfairness" criterion to the distribution of resources, product, income, and wealth that arises from economic decisions. Baumol extends the theory of fairness or equity in micropolicy beyond its more common technical analysis by exploring its applicability to a variety of practical and applied economic problems. He demonstrates that the tradeoff between fairness and efficiency in economic decision making does not have to be as great as generally believed, and he demonstrates a theory of fairness that provides economists with the analytic tools to make fairness analysis tractable. Superfairness covers a wide range of applications such as rationing, cross-subsidy pricing (as in telephone and utility services), predatory pricing, transfer payments and progressive taxation, wage negotiations, divorce settlements, and arbitration.

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  • Revisiting Keynes

    Revisiting Keynes

    Economic Possibilities for Our Grandchildren

    Lorenzo Pecchi and Gustavo Piga

    Leading economists revisit a provocative essay by John Maynard Keynes, debating Keynes's vision of growth, inequality, work, leisure, entrepreneurship, consumerism, and the search for happiness in the twenty-first century.

    In 1931 distinguished economist John Maynard Keynes published a short essay, “Economic Possibilities for Our Grandchildren,” in his collection Essays in Persuasion. In the essay, he expressed optimism for the economic future despite the doldrums of the post-World War I years and the onset of the Great Depression. Keynes imagined that by 2030 the standard of living would be dramatically higher; people, liberated from want (and without the desire to consume for the sake of consumption), would work no more than fifteen hours a week, devoting the rest of their time to leisure and culture. In Revisiting Keynes, leading contemporary economists consider what Keynes got right in his essay—the rise in the standard of living, for example—and what he got wrong—such as a shortened work week and consumer satiation. In so doing, they raise challenging questions about the world economy and contemporary lifestyles in the twenty-first century.

    The contributors—among them, four Nobel laureates in economics—point out that although Keynes correctly predicted economic growth, he neglected the problems of distribution and inequality. Keynes overestimated the desire of people to stop working and underestimated the pleasures and rewards of work—perhaps basing his idea of “economic bliss” on the life of the English gentleman or the ideals of his Bloomsbury group friends. In Revisiting Keynes, Keynes's short essay—usually seen as a minor divertissement compared to his other more influential works—becomes the catalyst for a lively debate among some of today's top economists about economic growth, inequality, wealth, work, leisure, culture, and consumerism.

    Contributors William J. Baumol, Leonardo Becchetti, Gary S. Becker, Michele Boldrin, Jean-Paul Fitoussi, Robert H. Frank, Richard B. Freeman, Benjamin M. Friedman, Axel Leijonhufvud, David K. Levine, Lee E. Ohanian, Edmund S. Phelps, Luis Rayo, Robert Solow, Joseph E. Stiglitz, Fabrizio Zilibotti

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