References of "Irmen, Andreas 50002026"
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See detailEndogenous Factor Income Distribution: Piketty meets Romer
Irmen, Andreas UL; Tabakovic, Amer UL

in Economic Inquiry (2020)

What is the relationship between the economy’s long-run growth rate, its capital-income ratio, and its factor income distribution? We argue that a satisfactory answer must be derived in an analytical ... [more ▼]

What is the relationship between the economy’s long-run growth rate, its capital-income ratio, and its factor income distribution? We argue that a satisfactory answer must be derived in an analytical framework that treats the growth and the savings rate as endogenous. From this perspective we scrutinize Piketty’s (2014) theory put forth in his book Capital in the Twenty-First Century in a richly parameterized variant of Romer’s (1990) seminal model with and without population growth. The economy’s growth and its savings rate are exogenous in Piketty’s theory and endogenous in Romer’s. We find that a smaller long-run growth rate may be associated with a smaller capital-income ratio. Hence, the key implication of Piketty’s Second Fundamental Law of Capitalism does not hold. Moreover, in contrast to Piketty’s theory, a smaller long-run growth rate may go together with a greater or a smaller capital share. [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, 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 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 ▲]

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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 detailRents and Research in Modern Growth Theory
Irmen, Andreas UL

Presentation (2019)

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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 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: 14 (0 UL)
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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: 15 (0 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 detailWie Luxemburg weiter wachsen kann
Irmen, Andreas UL

Article for general public (2018)

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See detailBaustelle Digitalisierung
Irmen, Andreas UL; André, Bauler

Article for general public (2018)

Detailed reference viewed: 34 (1 UL)
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See detailTechnological Progress, the Supply ofHours Worked, and the Consumption-Leisure Complementarity
Irmen, Andreas UL

E-print/Working paper (2018)

At least since 1870 hours worked per worker declined and real wages increased in many of today’s industrialized countries. The dual nature of technological progress in conjunction with a consumption ... [more ▼]

At least since 1870 hours worked per worker declined and real wages increased in many of today’s industrialized countries. The dual nature of technological progress in conjunction with a consumption-leisure complementarity explains these stylized facts. Technological progress drives real wages up and expands the amount of available consumption goods. Enjoying consumption goods increases the value of leisure. Therefore, individuals demand more leisure and supply less labor. This mechanism appears in an OLG-model with two-period lived individuals equipped with per-period utility functions of the generalized log-log type proposed by Boppart-Krusell (2016). The optimal plan is piecewise defined and hinges on the wage level. Technological progress moves a poor economy out of a regime with low wages and an inelastic supply of hours worked into a regime where wages increase further and hours worked continuously decline. [less ▲]

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See detailTechnological Progress, the Supply ofHours Worked, and the Consumption-Leisure Complementarity
Irmen, Andreas UL

Scientific Conference (2018)

At least since 1870 hours worked per worker declined and real wages increased in many of today’s industrialized countries. The dual nature of technological progress in conjunction with a consumption ... [more ▼]

At least since 1870 hours worked per worker declined and real wages increased in many of today’s industrialized countries. The dual nature of technological progress in conjunction with a consumption-leisure complementarity explains these stylized facts. Technological progress drives real wages up and expands the amount of available consumption goods. Enjoying consumption goods increases the value of leisure. Therefore, individuals demand more leisure and supply less labor. This mechanism appears in an OLG-model with two-period lived individuals equipped with per-period utility functions of the generalized log-log type proposed by Boppart-Krusell (2016). The optimal plan is piecewise defined and hinges on the wage level. Technological progress moves a poor economy out of a regime with low wages and an inelastic supply of hours worked into a regime where wages increase further and hours worked continuously decline. [less ▲]

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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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See detailTASKS, TECHNOLOGY, AND FACTOR PRICES IN THE NEOCLASSICAL PRODUCTION SECTOR
Irmen, Andreas UL

E-print/Working paper (2018)

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 market size 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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