Quotation Gasteiger, Emanuel, Prettner, Klaus. 2021. Automation, Stagnation, and the Implications of a Robot Tax. Macroeconomic Dynamics.


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Abstract

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.

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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Macroeconomic Dynamics
Citation Index SSCI
WU-Journal-Rating new FIN-A, VW-C
Language English
Title Automation, Stagnation, and the Implications of a Robot Tax
Year 2021
Reviewed? Y
URL https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/automation-stagnation-and-the-implications-of-a-robot-tax/3D796A6890203B0C268EE4D6DF18A39B
DOI https://doi.org/10.1017/S1365100520000139
Open Access N

Associations

People
Prettner, Klaus (Details)
External
Gasteiger, Emanuel (Vienna University of Technology, Austria)
Organization
Department of Economics (Crespo Cuaresma) (Details)
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