Reference : Automation, Growth, and Factor Shares in the Era of Population Aging
E-prints/Working papers : Already available on another site
Business & economic sciences : Macroeconomics & monetary economics
http://hdl.handle.net/10993/45267
Automation, Growth, and Factor Shares in the Era of Population Aging
English
Irmen, Andreas mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) >]
2020
DEM Discussion Paper 15-2020, University of Luxembourg
No
[en] Population Aging ; Automation ; Factor Shares ; , Endogenous Technical Change ; Endogenous Labor Supply
[en] How does population aging affect economic growth and factor shares in times of increasingly automatable production processes? The present paper addresses this question in a new macroeconomic 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 if wages are higher. Automation is shown to boost the aggregate demand for labor if and only if the incentives to automate are strong enough and to reduce the labor share. These predictions obtain even though automation is labor-augmenting in the reduced-form production function. Population aging due to a higher longevity or a decline in fertility may strengthen or weaken the incentives to automate. Irrespective of its source, population aging is predicted to increase the growth rate of per-capita GDP in the short and in the long run. The short-run effect of higher longevity on the labor share is positive whereas the effect of a declining fertility is negative. In the long run, population aging reduces the labor share.
Researchers
http://hdl.handle.net/10993/45267
https://ideas.repec.org/p/luc/wpaper/20-15.html

There is no file associated with this reference.

Bookmark and Share SFX Query

All documents in ORBilu are protected by a user license.