William J. Baumol

William J. Baumol
New York University | NYU · Berkley Center for Entrepreneurship and Innovation

Phd

About

154
Publications
29,022
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21,844
Citations
Citations since 2017
1 Research Item
6053 Citations
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201720182019202020212022202302004006008001,000
Additional affiliations
September 1991 - present
Princeton University
Position
  • Professor (Full)

Publications

Publications (154)
Article
Full-text available
The purpose of this exploratory study was to examine the cultivation of innovative entrepreneurial intentions among students in three distinctive educational settings: a U.S. undergraduate four-year environment, a U.S. M.B.A two-year environment, and a German five-year business and technology environment. Results suggested that innovative entrepren...
Article
The purpose of this exploratory study was to examine the cultivation of innovative entrepreneurial intentions among students in three distinctive educational settings: a U.S. undergraduate four-year environment, a U.S. M.B.A two-year environment, and a German five-year business and technology environment. Results suggested that innovative entrepren...
Article
Full-text available
The purpose of this paper was to explore innovative entrepreneurship and to gain insight into the educational practices and experiences that increase the likelihood that a student would graduate with innovative entrepreneurial intentions. To this end, we administered a battery of assessments to 3,700 undergraduate seniors who matriculated in the sp...
Article
Full-text available
The level of health care spending in the United States and other developed nations is rising at a disturbingly rapid rate. However, in the United States, these increases are not justified by superior performance. Rather, most other wealthy countries' inhabitants live longer and suffer from fewer medical problems than the average American. This pape...
Article
Full-text available
In most introductory textbooks on principles of economics, discussion of the theory or practice of entrepreneurship is almost entirely absent. This omission is striking, given the important role in economic growth that economists assign to the entrepreneur. While there are plausible explanations for this omission, new research suggests the beginnin...
Chapter
A wide range of United States political policies influence the level of innovative entrepreneurial activity in the country, that is the number of new businesses started each year that bring truly new products and ideas to the market. These policies begin with an educational system that fosters a creative, inventive, and educated population with the...
Article
This paper examines international trade issues as vital indicators of the economic prospects of the United States and other developed economies. In particular, it challenges misuses of the doctrine of mutual gains from trade and instead argues that comparative advantage does not guarantee increases in benefits to both trading partners—especially...
Article
This paper follows precedent in mixing substantive matters related to resource and environmental economics with an autobiographical framework. Unavoidably, this pushes the contents toward my own contributions to the field—especially those that, in my belief, have not received the attention they merit. After following precedent and beginning with so...
Article
Full-text available
The already high and still rising cost of health care has become a matter of serious concern and a subject of political dispute. The problem has no magic cures but, as is shown here, there are a number of promising modifications in current practice that promise to reduce the required outlays without impairing appropriate health care. Continual repo...
Article
Three historical papers on the influence of the innovative entrepreneur upon the achievements of their economies were presented at the annual meeting of the ASSA held in Atlanta in January 2010. The focus of the session was on the incentive structure built into the institutions of the three economies investigated, each of which had experienced an e...
Article
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In this paper we briefly review the work of Wassily Leontief, in respect for his memory and appreciation of his accomplishment. His work encompasses and redirects the entire field of economics, including pure theory.
Article
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"Observations, such as the many celebrated inventive entrepreneurs with minimal schooling, lead to the hypothesis that protracted and rigorous education can impede entrepreneurship. Systematic analysis of biographies of noted inventors and entrepreneurs appears not to support the hypothesis. We do find that with time, entrepreneurial and inventor e...
Article
Globalization has brought about fundamental change. But, the same theory that shows that free trade is beneficial also shows that globalization can be harmful to at least one of the trading countries. Moreover, with globalization, the interests of a country and its companies may diverge. In this paper, we examine free trade in a globalizing world a...
Article
The signatories to this document are economists who have studied telecommunications, auctions, and competition policy. While we may disagree about the stimulus package, we believe that it is important to implement mechanisms that make stimulus spending as efficient as possible. To that end, we have come together to encourage the National Telecommun...
Article
Full-text available
The explosion of medical knowledge has deluged the medical community with a plethora of new medicines, new tests, and new procedures. This creates a serious need to carefully evaluate the definable benefits from these new developments, which promise to increase the quality of medical care beyond older, established, and usually less-costly methods....
Article
The linkLine price squeeze case pending in the Supreme Court for the Fall 2008 Term is one of the most significant antitrust cases on monopolization law that the Court has taken in years. Amici are professors and scholars in law and economics who have taught, or have conducted research on, antitrust law and the economics of industrial organization....
Article
Full-text available
As economists, we believe that the Second Circuit's ruling, by not allowing the consideration of important information about the relationships between the benefits and costs of alternatives, is economically unsound. In particular, we believe that, as a general principle, regulators cannot make rational decisions unless they are allowed to compare c...
Article
The fundamental conflict in the goals of intellectual property (IP) policy is the apparent incompatibility of protection of the creator and ease of dissemination. Copyrights and patents seem to favor the first goal and conflict with the second, but patents have actually helped to resolve the conflict by transforming the IP into a tradable commodity...
Article
Licensing of copyrighted material can contribute to welfare. But what fee is socially desirable fee? The owner's marginal cost of licensing is often near zero, but P = MC = 0 is arguably neither equitable nor an efficient incentive for further creative activity. Here two fee-setting approaches are described, assuming copyright rules are pre-establi...
Article
Imprenditorialità innovativa: quali politiche per il sostegno della crescita economica? - Nel presente articolo analizziamo le politiche atte a promuovere l’imprenditorialità di tipo innovativo, vale a dire, ci interroghiamo su quali siano le politiche più idonee a promuovere il sostegno e l’espansione delle attività imprenditoriali di tipo innovat...
Article
Entrepreneurs who focus on innovation in their products, their production techniques, and their markets play a key role in economic growth. The direction of their activity is guided by their goals: wealth, power, and prestige. Current institutions, shaped by history and government are critical in determining where entrepreneurs will find it most pr...
Article
The linkLine price squeeze case from the Ninth Circuit is the most important antitrust case that the Supreme Court could take during the Fall 2007 Term. Amici are professors and scholars in law and economics who have taught, or have conducted research on, antitrust law and the economics of industrial organization. They include William J. Baumol, Ro...
Article
Economists have long recognized that certainty of contract is essential to a healthy economy. Long-term forward contracts, in particular, help reduce financial risk. Those contracts can only accomplish that goal, however, if parties know the contracts will be enforced. From an economic and policy standpoint, long-term energy contracts should be abr...
Article
The relationship between the magnitude of world trade and entrepreneurship goes both ways. Since 1800, world trade grew about 13 times the phenomenal expansion in global output, largely a consequence of innovation — from measurement of longitude to transport of materials by air and information by Internet. Entrepreneurs were key in ensuring effecti...
Article
The notion that substantial inequality is a stimulus to growth is extremely questionable. It is noted that a highly impoverished sector of the population reduces the productivity of the labor force. Moreover, the evidence that independent inventors and innovative entrepreneurs as a group receive compensation below those of equally educated employee...
Article
The conventional wisdom is that the surge in productivity growth which has surged in the United States over the past 15 years has been attributed almost wholly to advances in the production and use of information technology. While this is certainly evident from the statistics, a driving force behind the IT revolution has been the development and gr...
Article
This article is a step toward inclusion of the entrepreneurs, with their critical role in innovation and growth, into elementary mainstream microtheory. It describes how market pressures tend to enforce discriminatory pricing even in the basic Schumpeterian model. Moreover, the discriminatory prices the market imposes on those engaged in the innova...
Article
Imagine this: a mere century ago, the purchasing power of an average American was one-tenth of what it is today. But what will it take to sustain that growth through the next century? And what can be said about economic growth to aspiring nations seeking higher standards of living for their citizens? In Good Capitalism, Bad Capitalism, and the Econ...
Article
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The "parallel behavior is enough" standard cannot assist the courts in distinguishing horizontal agreements to restrain trade from normal competition. It would very likely impose significant costs on the economy by distorting competitive incentives and encouraging meritless litigation designed mainly to induce financial settlements.
Article
In this statement, a group of economists assembled by the AEI-Brookings Joint Center makes the following two recommendations to improve the competitive provision of broadband services. First, Congress should eliminate local franchising regulations, which serve as a barrier to new entry. Second, Congress and the Federal Communications Commission sho...
Article
I have already and repeatedly joined other voices in noting the virtual expulsion of the entrepreneur from contemporary mainstream literature of economics. I have also joined the call for the restoration of the entrepreneurs' place in the theory, given the fact that no one seems to deny their importance for the workings of the free-market economy i...
Chapter
Full-text available
This article describes the recent expansion of research on entrepreneurship, innovation and growth. Although the entrepreneur is widely credited with critical contributions to innovation and growth, the subject of entrepreneurship has virtually disappeared from mainstream theory and standard textbooks. Reasons explaining this gap are indicated. In...
Article
I can only applaud Dan Johansson's excellent and highly illuminating article (Johansson 2004). I have already and repeatedly joined other voices in noting the virtual expulsion of the entrepreneur from the contemporary mainstream literature of economics. I have also joined the call for the restoration of the entrepreneurs’ place in theory, given...
Article
This paper explores the following hypotheses on the appropriate education for innovating entrepreneurship: a) breakthrough inventions are contributed disproportionately by independent inventors and entrepreneurs, while large firms focus on cumulative, incremental (and often invaluable) improvements; b) education for mastery of scientific knowledge...
Article
The paper studies the principal influences accounting for the unprecedented growth and innovation performance of the free-market economies. It indicates that vigorous oligopolistic competition, particularly in high-tech industries, forces firms to keep innovating in order to survive. This leads them to internalize innovative activities rather than...
Article
In this piece, we respond to comments on our earlier essay on access pricing in telecommunications on the efficient component-pricing rule (ECPR) that appeared in the Winter, 1994 issue of the Yale Journal on Regulation. We are in essential agreement with the comments of Professor Alfred Kahn and Dr. William Taylor, and we are unconvinced by Dr. Wi...
Article
A recurring issue in the regulation of public utilities is whether the firm should be permitted to recover the cost of particular assets through its allowed rates. The traditional standards have been the backward-looking prudency test and the forward-looking used-and-useful test. Under the latter, the utility may recover the cost of a particular as...
Article
Local telephone companies have long been regulated as natural monopolies. However, technological innovation and the prospect of falling regulatory barriers to entry now expose some portions of the local exchange to competition from cable television systems, wireless telephony, and rival wireline systems. Nevertheless, it is probable that certain pa...
Article
Through the end of the twentieth century, the most critical regulatory issue facing electric utilities was stranded costs, which can be defined as those costs that the utilities were permitted to recover through their rates but whose recovery may have been impeded or prevented by the advent of competition in the industry. These costs represent expe...
Article
Competition and antitrust policies have been based on a scholarly tradition focusing on static models and static analyses of industrial organization. However, recent developments in the industrial organization literature have provided significant advances moving beyond the traditional static models and the pre-occupation with price competition. In...
Article
We are used to the idea that collusion among firms is legitimately presumed to be damaging to the public interest, and that the antitrust authorities are fully justified in taking coordination of prices to merit prohibition per se as inexcusable in any circumstances. One reaches that conclusion when one thinks about price as the matter being decide...
Article
The article describes and evaluates four principles that have been used or proposed to guide regulation of access to essential bottleneck facilities by competitors of the owner of those facilities: fully distributed cost, incremental cost, Ramsey pricing and parity pricing. It is shown that parity prices are the only prices that give no added compe...
Article
As we understand it, the D.C. Circuit did not allow the EPA to consider the costs of complying with ozone and PM NAAQS. As we further understand it, this legal ruling can be overturned only by this Court. As economists, we believe that the D.C. Circuit's ruling not allowing the EPA to consider important information relating to the consequences of i...
Article
Some of this century's many valuable contributions to economics, like macroeconomics, econometrics, and game theory, are widely recognized. However, arguably equally important is the enhanced role of empirical study permitted by more abundant data and improved methods. Also insufficiently recognized are the increased rigor and use of applied econom...
Article
This review article takes the volume by Mario Amendola and Jean-Luc Gaffard Out of Equilibrium as the starting point of a general assessment of the scope and perspectives of out-of-equilibrium economics. After describing the particular subject-matter covered by Amendola and Gaffard, the author calls attention upon he fundamental role in their treat...
Book
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 Baumo...
Article
What is perhaps most curious about 'Say's law' is the continuing disagreement on its substance and to whom it should be credited. John Maynard Keynes summarized the law as 'supply creates its own demand' but it is now generally agreed that Keynes did not get it quite right. The author has been unable to ascertain who coined the term 'Say's law' but...
Chapter
This paper discusses some implications for the urgent current policy issues of trends in innovation and in international trade. While I will focus on U.S. data and trends, the problems and developments are also highly pertinent for Japan, Europe and the world’s other industrialized economies that have demonstrated vulnerability, sometimes with a la...
Article
This paper is the keynote speech delivered by Professor William Baumol at the First World Congress of Environmental Economists that was held in Venice on June 25-27, 1998. It analyses the situation of the environment under different economic regimes: the feudal society, Marxism and capitalism. After a brief description of the environmental situatio...
Article
The mean duration of unemployment has approximately doubled in the U.S. between the early 1950s and the mid-1990s, with most of the increase occurring since the early 1970s. We first construct a simple model linking the average duration of unemployment with the speed of technical change. Using aggregate time-series data for the U.S., we find strong...
Article
Neither neoclassical nor Keynesian economics displays much patience with the popular notion that technical progress of the labor-saving variety tends to swell the ranks of the unemployed. Those who believe that market forces tend automatically to bring the economy back, if not to "full employment," at least to a fairly stick "natural rate of unempl...
Article
We discuss the classical linear model of international trade. We show that many of the results of the scale economies models carry over to the linear case, notably the critical role of share of world output, and the resulting conflict in the interests of trading partners. We use the linear one-input production functions eijlij and Cobb-Douglas util...
Article
Part of a Symposium entitled, "Say's Law Revisited," this note is dedicated to showing that both Say's and Ricardo's concerns about unemployment were deeper than even the Kates article (in this symposium) suggests, that this concern even led Say to advocate a clear Keynesian remedy for unemployment: public works. Correspondingly, the paper shows th...
Article
In the presence of scale economies a country, that is the exclusive producer of a commodity can retain its monopoly against efforts of others to enter on a small scale even if that firm has neither absolute nor comparative advantage in its production. Equilibria can violate comparative advantage, be inefficient, and yet be stable. Equilibria that v...
Article
Puerto Rico experienced one of the world's most rapid growth rates in both GDP per capita and labor productivity — a performance that puts it into the same league as Japan, South Korea, Taiwan and Singapore. Moreover, Puerto Rico significantly narrowed the productivity gap between itself and the United States. Special circumstances played a role in...
Article
This article explores principles for execution of the widely accepted Areeda-Turner test of predatory pricing. Defining an Areeda-Turner price as one that does not threaten to exclude any more-efficient supplier, I conclude that (1) any individual price that is not below average avoidable cost cannot be predatory; (2) thus, average avoidable cost,...
Article
Full-text available
[fre] L'analyse montre une correspondance étroite entre le nombre élevé d'équilibres dans un modèle d'échange statique avec économies d'échelles et celui d'un modèle linéaire dans lequel la productivité d'un pays partenaire à l'échange augmente par rapport à celle de son partenaire. Il est montré que la croissance de la productivité dans un pays pa...
Article
A discussion of the changing economic climate for higher education looks at college costs in relation to other economic indicators, higher education costs in other countries, and hypothetical changes in spending and productivity in the next few decades. It is concluded that while the situation looks bleak, reconception of practices and reallocation...
Article
Full-text available
In this paper we examine the impact of membership in Preferential Trade Agreements (PTAs) on trade between PTA members. Rather than considering the impact of PTA membership on the volume of trade we consider the impact of membership on the structure of trade. For a large sample of countries over the period 1962-2000 we find that membership in a PTA...
Article
Full-text available
In this paper we examine the impact of membership in Preferential Trade Agreements (PTAs) on trade between PTA members. Rather than considering the impact of PTA membership on the volume of trade we consider the impact of membership on the structure of trade. For a large sample of countries over the period 1962-2000 we find that membership in a PTA...
Article
The article provides historical evidence suggesting that a substantial element in the explanation of the profusion of talented composers in the 18th century Habsburg empire was the fragmentation of the state into many near-independent states, each with its own court seeking entertainment and prestige through new musical offerings. The resulting pro...
Article
Input-output analysis becomes indispensable for rational policy formulation where two conditions hold: (1) inputs as well as outputs enter society's objective function directly (as in the case of employment, limited energy resources or pollution): and (2) where the economy in question is open, so that macroeconomic policy is largely powerless to in...
Article
Full-text available
In this paper we examine the impact of membership in Preferential Trade Agreements (PTAs) on trade between PTA members. Rather than considering the impact of PTA membership on the volume of trade we consider the impact of membership on the structure of trade. For a large sample of countries over the period 1962-2000 we find that membership in a PTA...
Article
Theoretical analysis often can penetrate difficult economic problems in circumstances where common sense is an unreliable guide to decision making. This paper provides some new theoretical problems related to entrepreneurial decisions and behavior. For example, it investigates the optimal timing of the introduction of an innovation. Typically, in p...
Article
An economic specter haunts the democratic governments of the world's most prosperous economies. The rising cost of health care and education casts a shadow over virtually every election, while increasing costs of other services play a part in the growth of the homeless population and the deteriorating sanitation of city streets. It will be shown he...
Article
Privatization outside Eastern Europe has encountered more difficulties than are generally recognized. The firms sold by government are often endowed with market power in part because when nationalized they had been protected from competition. Consequently they are often subjected to tight regulation after becoming private. Thus, the role of market...
Article
The possibility that we might gather a set of roughly compatible statistics for the costs and incomes of performing arts organiTations in the then USSR and the USA constituted an irresistible opportunity for a comparative study. While we did not achieve the degree of comparability we would have liked, we believe we still have something of interest...
Article
The design of policies to improve economic efficiency using the private sector as principal agent requires a clear understanding of the role of market structure. Contestability analysis, not ten years old, provides a tool for the purpose. The concept can guide the government that wants to have it both ways: to protect the public and smaller firms f...
Article
This paper considers the directions economics may take during the second century of the Economic Journal. Rather than attempting a (questionable) forecast, it suggests the directions research and teaching ought to take. It advocates more work that is not highly abstract and mathematical, more emphasis on application, more concern with the long run,...
Article
Those who announce the demise of American's position as an economic world leader are, like the author of Mark Twain's obituary, a bit premature. "Productivity and American Leadership "examines and analyzes the long run productivity performance of the United States, comparing it with that of other industrialized countries. It shows that the U.S. rec...
Article
The basic hypothesis is that, while the total supply of entrepreneurs varies among societies, the productive contribution of the society's entrepreneurial activities varies much more because of their allocation between productive activities, such as innovation, and largely unproductive activities, such as rent seeking or organized crime. This alloc...
Article
Full-text available
Imagine a bargaining model (say, involving diplomats negotiating tariff levels or a disarmament treaty) in which each party has been instructed by higher headquarters to respond to each new offer by her opposite number with a counteroffer that is to be calculated from a simple reaction function provided in advance. Both negotiating parties are proh...
Book
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 fairne...
Article
Maddison's 1870-1979 data are analyzed, showing the historically unprecedented growth in productivity, GDP per capita and exports and the remarkable convergence of productivities of industrialized market economies, with convergence apparently shared by planned economies but not less developed countries. Productivity lag's relation to "deindustriali...

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