Should we fear the robot revolution? (The correct answer is yes)

By Andrew Berg, Edward F. Buffie, Luis-Felipe Zanna. Journal of Monetary Economics, 2018

292 citations recorded by the source corpus.

Advances in artificial intelligence and robotics may be leading to a new industrial revolution. This paper presents a model with the minimum necessary features to analyze the implications for inequality and output. Two assumptions are key: “robot” capital is distinct from traditional capital in its degree of substitutability with human labor; and only capitalists and skilled workers save. We analyze a range of variants that reflect widely different views of how automation may transform the labor market. Our main results are surprisingly robust: automation is good for growth and bad for equality; in the benchmark model real wages fall in the short run and eventually rise, but “eventually” can easily take generations.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/c5e7b8f1723f2a56556fac7805d8b0a1691b4e7a

Citations in the corpus

• Is Automation Labor-Displacing? Productivity Growth, Employment, and the Labor Share (2018, unknown): “For example, Sachs and Kotlikoff (2012) and Berg et al. (2017) write down an overlapping-generation models in which rapid labor-saving technological advances generate short-run gains for skilled workers and capital owners, but in the longer run, immiserate those who are not able to invest in physica”