References of "Irmen, Andreas 50002026"
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See detailThe Supply of Hours Worked and Endogenous Growth Cycles
Irmen, Andreas UL; Iong, Ka-Kit UL

E-print/Working paper (2020)

We show that declining hours of work per worker in conjunction with a growing work force may give rise to growth cycles. This is accomplished in an overlapping generations model where individuals are ... [more ▼]

We show that declining hours of work per worker in conjunction with a growing work force may give rise to growth cycles. This is accomplished in an overlapping generations model where individuals are endowed with Boppart-Krusell preferences (Boppart and Krusell (2020)), i. e., the wage elasticity of their supply of hours worked is negative. On the supply side, economic growth is due to the expansion of consumption-good varieties through endogenous research. We show that a sufficiently negative equilibrium elasticity of the individual supply of hours worked to an expansion in the set of consumption-good varieties opens up the possibility of growth cycles where the economy fluctuates between two regimes, one with and the other without an active research sector. We identify period-2 and period-3 cycles, conclude with Li and Yorke (1975) that cycles of any periodicity exists, and generalize our findings to period-n cycles. We show that the possibility of cycles occurs under empirically plausible conditions. Throughout, we emphasize that the economics of cycles is linked to the intergenerational trade of shares and their pricing in the asset market. [less ▲]

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See detailThe Changing Future of Work
Irmen, Andreas UL

Conference given outside the academic context (2020)

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See detailExplaining the Decline in the US Labor Share: Taxation and Automation DEM Discussion Paper 20-2020, University of Luxembourg
Irmen, Andreas UL; Heer, Burkhard; Süssmuth, Bernd

E-print/Working paper (2020)

This study provides evidence for the US that the secular decline in the labor share is not only explained by technical change or globalization, but also by the dynamics of factor taxation, automation ... [more ▼]

This study provides evidence for the US that the secular decline in the labor share is not only explained by technical change or globalization, but also by the dynamics of factor taxation, automation capital, and population growth. First, we empirically find indications of co-integration for the 1974-2008 period. Permanent effects on factor shares emanate from relative factor taxation. The latter also have a lasting effect on the use of robots. Variance decompositions reveal that taxing contributes to changes in the two income shares and in automation capital. Second, we analyse and calibrate a neoclassical growth model extended to include factor taxation, automation capital, and capital adjustment costs. The model is able to replicate the dynamics of the observed functional income distribution in the US during the 1965-2015 period. Counterfactual experiments suggest that the fall in the labor share would have been significantly smaller if labor and capital income tax rates had remained at their respective level of the 1960s. [less ▲]

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See detailTasks, Technology, and Factor Prices in the Neoclassical Production Sector
Irmen, Andreas UL

in Journal of Economics (2020), 131(2), 101-121

This paper introduces tasks into the neoclassical production sector. Competitive firms choose the profit-maximizing amounts of factor-specific tasks that determine their factor demands and output supplies ... [more ▼]

This paper introduces tasks into the neoclassical production sector. Competitive firms choose the profit-maximizing amounts of factor-specific tasks that determine their factor demands and output supplies. We show that the effect of factor-augmenting technical change on relative and absolute factor prices can be decomposed into a productivity effect and a task-demand effect of opposite sign. These effects appear since the novel task-based approach distinguishes between the demands for tasks and the demands for factors. This perspective provides a new intuition for the emergence of relative and absolute factor biases and the role of the elasticity of substitution. [less ▲]

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See detailAutomation, Growth, and Factor Shares in the Era of Population Aging
Irmen, Andreas UL

Presentation (2020)

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See detailAutomation, Growth, and Factor Shares in the Era of Population Aging
Irmen, Andreas UL

Scientific Conference (2019)

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question ... [more ▼]

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question in a new model of automation where competitive firms perform tasks to produce output. Tasks require labor and machines as inputs. New machines embody superior technological knowledge and substitute for labor in the performance of tasks. The incentive to automate is stronger when the expected wage is higher or when the price of an automation investment is lower. Automation is shown to i) boost the aggregate demand for labor if the incentives to automate are strong enough and ii) reduce the labor share. These predictions obtain even though automation is labor-augmenting in the economy’s reduced-form production function. In the short run, population aging weakens the incentives to automate and increases the labor share as individuals augment their labor supply. These implications may be neutralized if, at the same time, the price of investment goods declines. In the log-run, population aging and a lower price of investment goods are reinforcing. Both imply more automation, a lower labor share, and faster economic growth. [less ▲]

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See detailAutomation, Economic Growth, and the Labor Share - A Comment on Prettner (2019)
Irmen, Andreas UL; Heer, Burkhard

E-print/Working paper (2019)

Prettner (2019) studies the implications of automation for economic growth and the labor share in a variant of the Solow-Swan model. The aggregate production function allows for two types of capital ... [more ▼]

Prettner (2019) studies the implications of automation for economic growth and the labor share in a variant of the Solow-Swan model. The aggregate production function allows for two types of capital, traditional and automation capital. Traditional capital and labor are imperfect substitutes whereas automation capital and labor are perfect substitutes. In this paper, we point to a flaw in Prettner’s analysis that invalidates his main analytical and computational findings. In contrast to Prettner, we argue that both kinds of capital are perfect substitutes as stores of value, and, therefore, must earn the same rate of return in equilibrium. Our computational analysis shows that the model dramatically overestimates the actual decline in the US labor share over the last 50 years. [less ▲]

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See detailAutomation, Growth, and Factor Shares in the Era of Population Aging
Irmen, Andreas UL

Scientific Conference (2019)

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question ... [more ▼]

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question in a new model of automation where competitive firms perform tasks to produce output. Tasks require labor and machines as inputs. New machines embody superior technological knowledge and substitute for labor in the performance of tasks. The incentive to automate is stronger when the expected wage is higher or when the price of an automation investment is lower. Automation is shown to i) boost the aggregate demand for labor if the incentives to automate are strong enough and ii) reduce the labor share. These predictions obtain even though automation is labor-augmenting in the economy’s reduced-form production function. In the short run, population aging weakens the incentives to automate and increases the labor share as individuals augment their labor supply. These implications may be neutralized if, at the same time, the price of investment goods declines. In the log-run, population aging and a lower price of investment goods are reinforcing. Both imply more automation, a lower labor share, and faster economic growth. [less ▲]

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See detailAutomation, Growth, and Factor Shares in the Era of Population Aging
Irmen, Andreas UL

Scientific Conference (2019)

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question ... [more ▼]

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question in a new model of automation where competitive firms perform tasks to produce output. Tasks require labor and machines as inputs. New machines embody superior technological knowledge and substitute for labor in the performance of tasks. The incentive to automate is stronger when the expected wage is higher or when the price of an automation investment is lower. Automation is shown to i) boost the aggregate demand for labor if the incentives to automate are strong enough and ii) reduce the labor share. These predictions obtain even though automation is labor-augmenting in the economy’s reduced-form production function. In the short run, population aging weakens the incentives to automate and increases the labor share as individuals augment their labor supply. These implications may be neutralized if, at the same time, the price of investment goods declines. In the log-run, population aging and a lower price of investment goods are reinforcing. Both imply more automation, a lower labor share, and faster economic growth. [less ▲]

Detailed reference viewed: 36 (2 UL)
See detailAutomation, Growth, and Factor Shares in the Era of Population Aging
Irmen, Andreas UL

Presentation (2019)

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question ... [more ▼]

How does population aging affect factor shares and economic growth in times of declining investment good prices and increasingly automated production processes? The present paper addresses this question in a new model of automation where competitive firms perform tasks to produce output. Tasks require labor and machines as inputs. New machines embody superior technological knowledge and substitute for labor in the performance of tasks. The incentive to automate is stronger when the expected wage is higher or when the price of an automation investment is lower. Automation is shown to i) boost the aggregate demand for labor if the incentives to automate are strong enough and ii) reduce the labor share. These predictions obtain even though automation is labor-augmenting in the economy’s reduced-form production function. In the short run, population aging weakens the incentives to automate and increases the labor share as individuals augment their labor supply. These implications may be neutralized if, at the same time, the price of investment goods declines. In the log-run, population aging and a lower price of investment goods are reinforcing. Both imply more automation, a lower labor share, and faster economic growth. [less ▲]

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See detailCatalyzing the Benefits of Globalization - Panel Chair of the session "Revitalizing Economic Grwoth"
Irmen, Andreas UL

Conference given outside the academic context (2019)

Detailed reference viewed: 37 (0 UL)
See detailRents and Research in Modern Growth Theory
Irmen, Andreas UL

Presentation (2019)

Detailed reference viewed: 63 (1 UL)
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See detailIndividual Attitudes towards Immigration in Aging Populations
Irmen, Andreas UL; Cömertpay, Rana UL; Litina, Anastasia UL

E-print/Working paper (2019)

This research empirically establishes the hypothesis that the process of population aging in a society as a whole affects the attitudes of its members towards immigration. Hence, an aging social ... [more ▼]

This research empirically establishes the hypothesis that the process of population aging in a society as a whole affects the attitudes of its members towards immigration. Hence, an aging social environment exerts an effect on the attitudes of individuals towards immigration after accounting for their age and other individual characteristics. We test this hypothesis in a multilevel analysis of individuals living in 25 European OECD countries over the period 2002-2017. Our measure of “societal population aging” is the old-age dependency ratio. “Attitudes” are taken from immigration related questions in eight consecutive rounds of the European Social Survey. For these attitudes we find non-linear, U-shaped relationships. Hence, the effect of societal population aging on individual attitudes towards immigration is negative in young societies and positive in old ones. [less ▲]

Detailed reference viewed: 113 (8 UL)
Peer Reviewed
See detailReview concerning the proposal to confer the degree of doctor honoris causa from Poznań University of Economics and Business on Oded Galor
Irmen, Andreas UL

in Poznań University of Economics and Business (PUEB) (Ed.) Odedowi Galorowi - doctor honoris causa (2019)

Detailed reference viewed: 55 (6 UL)
See detailWie Luxemburg weiter wachsen kann
Irmen, Andreas UL

Article for general public (2018)

Detailed reference viewed: 85 (1 UL)
See detailBaustelle Digitalisierung
Irmen, Andreas UL; André, Bauler

Article for general public (2018)

Detailed reference viewed: 53 (1 UL)
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Peer Reviewed
See detailA Generalized Steady-State Growth Theorem
Irmen, Andreas UL

in Macroeconomic Dynamics (2018)

Uzawa’s steady-state growth theorem (Uzawa (1961)) is generalized to a neoclassical economy that uses current output, e.g., to create technical progress or to manufacture intermediates. The difference ... [more ▼]

Uzawa’s steady-state growth theorem (Uzawa (1961)) is generalized to a neoclassical economy that uses current output, e.g., to create technical progress or to manufacture intermediates. The difference between aggregate final-good production and these resources is referred to as net output. The new generalized steady-state growth theorem holds since net output exhibits constant returns to scale in capital and labor. This insight provides an understanding for why technical change is labor-augmenting in steady state even if capital-augmenting technical change is feasible. By example, this point is made for four growth mod-els that allow for endogenous capital- and labor-augmenting technical change, namely, Irmen and Tabakovic (2015), Acemoglu (2003), Acemoglu (2009), Chapter 15, and for the typical model of the induced innovations literature of the 1960s.The reduced form of these models is shown to be consistent with the generalizedsteady-state growth theorem. [less ▲]

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