AUTOMATION, TAXES AND TRANSFERS WITH INTERNATIONAL RIVALRY

Rodney Tyers and Yixiao Zhou

No 18-07, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: Continued automation and declines in low-skill shares of GDP have been widespread globally and linked to inequality. We examine the long-term, global consequences of policies that foster automation or address the distributional consequences of it, using a six-region global macro model. Results depend on whether welfare criteria are Rawlsian, emphasizing the performance of low-skill households, Benthamite, which aggregate pecuniary measures, capital-owner friendly, or simply based on real GDP. Even where automation delivers only bias against the low skilled, we find that the fostering it is a dominant strategy under all but the Rawlsian criterion. We then consider a post automation scenario in which worker displacement is significant, examining inequality-constraining but balance-preserving fiscal interventions, such as tax-financed “earned income tax credits”. These generate only small international spillover effects and are for the most part not preferred under all criteria except the Rawlsian one.

Keywords: Automation; income distribution; taxes; transfers; global modelling (search for similar items in EconPapers)
JEL-codes: C68 D33 F21 F42 O33 (search for similar items in EconPapers)
Pages: 36
Date: 2018
Note: MD5 = 78d728971aec63a02ba6c8b3e339e871
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ecompapers.biz.uwa.edu.au/paper/PDF%20of%2 ... ers%20and%20Zhou.pdf (application/pdf)

Related works:
Working Paper: AUTOMATION, TAXES AND TRANSFERS WITH INTERNATIONAL RIVALRY (2022)
Working Paper: Automation, taxes and transfers with International rivalry (2018)
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:uwa:wpaper:18-07

Access Statistics for this paper

More papers in Economics Discussion / Working Papers from The University of Western Australia, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sam Tang ().