Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162732
Authors: 
Gasteiger, Emanuel
Prettner, Klaus
Year of Publication: 
2017
Series/Report no.: 
Discussion Paper, School of Business & Economics: Economics 2017/17
Abstract: 
We analyze the long-run growth effects of automation in the canonical overlapping generations framework. While automation implies constant returns to capital within this model class (even in the absence of technological progress), we show that it does not have the potential to lead to positive long-growth. The reason is that automation suppresses wages, which are the only source of investment because of the demographic structure of the overlapping generations model. This result stands in sharp contrast to the effects of automation in the representative agent setting, where positive long-run growth is feasible because agents can invest out of their wage income and out of their asset income. We also analyze the effects of a robot tax that has featured prominently in the policy debate on automation and show that it could raise the capital stock and per capita output at the steady state. However, the robot tax cannot induce a takeoff toward positive long-run growth.
Subjects: 
automation
robots
robot taxes
investment
stagnation
economic growth
canonical overlapping generations model
fiscal policy
JEL: 
J10
J20
O14
O33
O41
E62
Document Type: 
Working Paper

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