Frictions and the diffusion of automation

Nikolaos Charalampidis

Manchester School, 2024, vol. 92, issue 2, 148-170

Abstract: This paper studies the implications of business cycle frictions for the diffusion of permanent changes in automation. Incorporating task‐based production in different versions of the New Keynesian model reveals considerable short‐run implications. Price‐distorting nominal rigidities amplify the labor displacement and attenuate the productivity and welfare gains of automation during the transition to the new equilibrium. They exacerbate the falls in the labor income share, the job finding probability, the value of long‐term contracts, and labor market tightness. The inflation response follows a J‐curve. Frictions in capital supply and wage rigidities amplify the labor displacement and attenuate the productivity gains too.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/manc.12461

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:manchs:v:92:y:2024:i:2:p:148-170

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786

Access Statistics for this article

Manchester School is currently edited by Keith Blackburn

More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().