The implications of automation for economic growth and the labor share of income

Klaus Prettner

No 04/2016, ECON WPS - Working Papers in Economic Theory and Policy from TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit

Abstract: We introduce automation into the standard Solovian model of capital accumulation and show that (i) there is the possibility of perpetual growth, even in the absence of technological progress; (ii) the long-run economic growth rate declines with population growth, which is consistent with the available empirical evidence; (iii) there is a unique share of savings diverted to automation that maximizes the long-run growth rate of the economy; (iv) the labor share declines with automation to an extent that fits to the observed pattern.

Keywords: automation; robots; machine learning; perpetual economic growth; declining labor share; inequality (search for similar items in EconPapers)
JEL-codes: O11 O33 O41 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-gro
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuweco:042016

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