Automation, stagnation, and the implications of a robot tax

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECON WPS ; No. 02/2020

Classification and Topics

• Classification: Wirtschaft ; Technological Change: Choices and Consequences; Diffusion Processes ; One, Two, and Multisector Growth Models ; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
• Subject: Automation ; robot taxes ; stagnation ; economic growth ; fiscal policy

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gasteiger, Emanuel ; Prettner, Klaus
• Event: Veröffentlichung
• (who): Vienna University of Technology, Institute of Statistics and Mathematical Methods in Economics, Research Group Economics
• (where): Vienna
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/215429
• Last update: 10.03.2025, 11:42 AM CET