 The implications of automation for economic growth when investment decisions are irreversibleJürgen Antony and Torben Klarl No 1903, Bremen Papers on Economics & Innovation from University of Bremen, Faculty of Business Studies and Economics Abstract: This paper discusses automation embedded into a standard growth model without exogenous growth when investment decisions for physical and automation capital are irreversible. The imposed nonnegativity constraints on physical and automation capital induces an imbalance effect between the growth rate of output and the fraction between physical and automation capital. The paper shows that this imbalance effect leads (i) to transitional dynamics off the steady state while (ii) retaining perpetual growth of the AK style in the steady state without exogenous technological progress. We also show that the resulting transition path does not have to be on the saddle path of the system without the nonnegativity constraints. Keywords: Automation; perpetual economic growth; irreversibility of investment decisions (search for similar items in EconPapers) Published in Economics Letters, 186, p.108757. Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:atv:wpaper:1903 DOI: 10.26092/elib/209 Access Statistics for this paper More papers in Bremen Papers on Economics & Innovation from University of Bremen, Faculty of Business Studies and Economics Contact information at EDIRC. |
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