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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECON WPS ; No. 04/2016

Classification and Topics

• Classification: Wirtschaft ; Macroeconomic Analyses of Economic Development ; Technological Change: Choices and Consequences; Diffusion Processes ; One, Two, and Multisector Growth Models
• Subject: automation ; robots ; machine learning ; perpetual economic growth ; declining labor share ; inequality

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Prettner, Klaus
• Event: Veröffentlichung
• (who): Vienna University of Technology, Institute of Statistics and Mathematical Methods in Economics, Research Group Economics
• (where): Vienna
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/141275
• Last update: 10.03.2025, 11:45 AM CET