Related papers: The Demand Externality of Automation
A central question in economics is whether automation will displace human labor and diminish standards of living. Whilst prior works typically frame this question as a competition between human labor and machines, we frame it as a…
This study examines the relationship between automation and income inequality across different countries, taking into account the varying levels of technological adoption and labor market institutions. The research employs a panel data…
It is widely assumed that increases in economic productivity necessarily lead to economic growth. In this paper, it is shown that this is not always the case. An idealized model of an economy is presented in which a new technology allows…
An increasingly large number of experiments study the labor productivity effects of automation technologies such as generative algorithms. A popular question in these experiments relates to inequality: does the technology increase output…
This paper develops a unified framework for evaluating the optimal degree of task automation. Moving beyond binary automate-or-not assessments, we model automation intensity as a continuous choice in which firms minimize costs by selecting…
Common narratives about automation often pit new technologies against workers. The introduction of advanced machine tools, industrial robots, and AI have all been met with concern that technological progress will mean fewer jobs. However,…
If AI displaces human workers faster than the economy can reabsorb them, it risks eroding the very consumer demand firms depend on. We show that knowing this is not enough for firms to stop it. In a competitive task-based model, demand…
Considering the production processes, it was noted that the use of various equipment leads to an increase in output -- the phenomenon that is usually described as the substitution of labor with capital. The proposed theory of substitution…
A central socioeconomic concern about Artificial Intelligence is that it will lower wages by depressing the labor share - the fraction of economic output paid to labor. We show that declining labor share is more likely to raise wages. In a…
A firm can complete the tasks needed to produce output using either machines or workers. Unlike machines, workers have private information about their preferences over tasks. I study how this information asymmetry shapes the mechanism used…
In this paper, we examine in an abstract framework, how a tradeoff between efficiency and robustness arises in different dynamic oligopolistic market architectures. We consider a market in which there is a monopolistic resource provider and…
The design of data markets has gained importance as firms increasingly use machine learning models fueled by externally acquired training data. A key consideration is the externalities firms face when data, though inherently freely…
We study a heterogeneous agent macroeconomic model with an infinite number of households and firms competing in a labor market. Each household earns income and engages in consumption at each time step while aiming to maximize a concave…
As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a model integrating structural change and regional disparities to jointly capture these phenomena. A key…
We argue that the recent growth in income inequality is driven by disparate growth in investment income rather than by disparate growth in wages. Specifically, we present evidence that real wages are flat across a range of professions,…
We extend the work on optimal investment and consumption of a population considered in [2] to a general stochastic setting over a finite time horizon. We incorporate the Cobb-Douglas production function in the capital dynamics while the…
The article examines how institutions, automation, unemployment and income distribution interact in the context of a neoclassical growth model where profits are interpreted as a surplus over costs of production. Adjusting the model to the…
In a wide array of areas, algorithms are matching and surpassing the performance of human experts, leading to consideration of the roles of human judgment and algorithmic prediction in these domains. The discussion around these…
The Fourth Industrial Revolution commonly refers to the accelerating technological transformation that has been taking place in the 21st century. Economic growth theories which treat the accumulation of knowledge and its effect on…
This essay examines how automation has reconfigured mathematical proof and labor, and what might happen in the future. It discusses practical standards of proof, distinguishes between prominent forms of automation in research, provides…