Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
8954611 | Journal of Monetary Economics | 2018 | 73 Pages |
Abstract
Advances in artificial intelligence and robotics may be leading to a new industrial revolution. This paper presents a model with the minimum necessary features to analyze the implications for inequality and output. Two assumptions are key: “robot” capital is distinct from traditional capital in its degree of substitutability with human labor; and only capitalists and skilled workers save. We analyze a range of variants that reflect widely different views of how automation may transform the labor market. Our main results are surprisingly robust: automation is good for growth and bad for equality; in the benchmark model real wages fall in the short run and eventually rise, but “eventually” can easily take generations.
Keywords
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Economics and Econometrics
Authors
Andrew Berg, Edward F. Buffie, Luis-Felipe Zanna,