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The impact of aging and automation on the macroeconomy and inequality

Nikolai Stähler ()

No 30/2020, Discussion Papers from Deutsche Bundesbank

Abstract: We build a life-cycle model in which a representative firm produces a final good using routine and non-routine labor as well as traditional and automation capital (e.g. robots). Robots can substitute for routine labor. We show that both, population aging and higher robot productivity, foster the increased use of robotics. Population aging decreases and progress in robot technology increases long-run output per capita. In both cases, inequalities in labor income, wealth and consumption rise. Although expected advances in automation technologies are able to mitigate or even circumvent output losses in the aggregate and improve consumption possibilities for everyone, this comes at the cost of increased inequality because non-routine workers benefit disproportionately.

Keywords: Life-Cycle model; Automation; Robots; Inequality (search for similar items in EconPapers)
JEL-codes: J11 J23 J24 O33 O49 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-age, nep-lab and nep-ore
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Journal Article: The Impact of Aging and Automation on the Macroeconomy and Inequality (2021) Downloads
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