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Robot Arithmetic: New Technology and Wages

Francesco Caselli and Alan Manning

American Economic Review: Insights, 2019, vol. 1, issue 1, 1-12

Abstract: Existing economic models show how new technology can cause large changes in relative wages and inequality. But there are also claims, based largely on verbal expositions, that new technology can harm workers on average or even all workers. This paper shows—under plausible assumptions—that new technology is unlikely to cause wages for all workers to fall and will cause average wages to rise if the prices of investment goods fall relative to consumer goods (a condition supported by the data). We outline how results may change with different assumptions.

JEL-codes: D31 G31 J22 J24 J31 O31 O33 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/aeri.20170036
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