Automation, stagnation, and the implications of a robot tax
Emanuel Gasteiger and
No 02/2020, ECON WPS - Working Papers in Economic Theory and Policy from TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit
We assess the long-run growth effects of automation in the overlapping generations framework. Although automation implies constant returns to capital and, thus, an AK production side of the economy, positive long-run growth does not emerge. The reason is that automation suppresses wage income, which is the only source of investment in the overlapping generations model. Our result stands in sharp contrast to the representative agent setting with automation, where sustained long-run growth is possible even without technological progress. Our analysis therefore provides a cautionary tale that the underlying modeling structure of saving/investment decisions matters for the derived economic impact of automation. In addition, we show that a robot tax has the potential to raise per capita output and welfare at the steady state. However, it cannot induce a takeoff toward positive long-run growth.
Keywords: Automation; robot taxes; stagnation; economic growth; fiscal policy (search for similar items in EconPapers)
JEL-codes: E60 O33 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-gro, nep-mac, nep-ore, nep-pay and nep-pbe
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Journal Article: AUTOMATION, STAGNATION, AND THE IMPLICATIONS OF A ROBOT TAX (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuweco:022020
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