Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/215429
Authors: 
Gasteiger, Emanuel
Prettner, Klaus
Year of Publication: 
2020
Series/Report no.: 
ECON WPS No. 02/2020
Abstract: 
We assess the long-run growth effects of automation in the overlapping generations framework. Although automation implies constant returns to capital and, thus, an AK production side of the economy, positive long-run growth does not emerge. The reason is that automation suppresses wage income, which is the only source of investment in the overlapping generations model. Our result stands in sharp contrast to the representative agent setting with automation, where sustained long-run growth is possible even without technological progress. Our analysis therefore provides a cautionary tale that the underlying modeling structure of saving/investment decisions matters for the derived economic impact of automation. In addition, we show that a robot tax has the potential to raise per capita output and welfare at the steady state. However, it cannot induce a takeoff toward positive long-run growth.
Subjects: 
Automation
robot taxes
stagnation
economic growth
fiscal policy
JEL: 
O33
O41
E60
Document Type: 
Working Paper

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