> Basically, services that have to be provided by western labour in the west have got much more expensive, while goods that can be imported have got much cheaper.

This is broadly true though the bit about the West and imports is unnecessary. Manufactured goods have gotten cheaper whether imported or not in real terms, and services get more expensive in relative terms as a consequence. Some of this is probably a result of government misregulation but not all. Cosmetic surgery isn’t covered by insurance, nor is LASIK or hair loss treatment and in inflation adjusted terms prices have been basically flat for over a decade, neglecting the huge increases in quality. Education probably has similarly large inefficiencies, even outside institutions that exist only because of easily available student loans and non-existent quality control like the University of Phoenix.

But Cost Disease is the inevitable product of economic growth. The more capital you have the more labor will be paid because Money is just less valuable to you when you have lots and labour vice versa.

A long report on Baumol’s cost disease in the US context and internationally.

https://www.mercatus.org/system/files/helland-tabarrok_why-a...

I don't think it's about imports / foreign production, but about the requirement of labour of high income workers generally. Domestic agriculture and manufacturing have experienced less inflation than medicine and education because they have reduced their dependence on labour with greater mechanisation and efficiency.

I think there's also an effect that people are increasingly able to tolerate working very low economic value jobs, because productivity increases in basic necessities of survival, like food and transportation, make this possible. These people are then priced out of healthcare, education, and quality housing. The decreased consumption of expensive labour-based services then decreases their weighting in measures of inflation, allowing them to further inflate, yet overall inflation stay low.