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We present a three sector OLG model with a homogeneous output good that is produced with traditional or robot technology. The traditional sector produces with labor and capital, whereas the modern sector employs robots instead of labor. Robots and workers are modeled as perfect substitutes to invest...

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Bibliographic Details
Published in:International review of economics 2023, Vol.70 (3), p.283-300
Main Authors: Akar, Gizem, Casalone, Giorgia, Zagler, Martin
Format: Article
Language:English
Subjects:
Automation
Basic income
Economic growth
Economic Policy
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Employment
History of Economic Thought/Methodology
Labor market
Law and Economics
Quality of Life Research
Research Article
Robots
Social Policy
Taxation
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Summary:We present a three sector OLG model with a homogeneous output good that is produced with traditional or robot technology. The traditional sector produces with labor and capital, whereas the modern sector employs robots instead of labor. Robots and workers are modeled as perfect substitutes to investigate whether economic policy under the harshest assumptions is able to prevent the ascent of a robotized economy. While we find that the transition is inevitable, higher taxes on robots and revenues can slow down the process. We also that the economy will switch from an exogenous growth model based on TFP to an endogenous growth model due to constant returns with respect to reproducible factors of production as it becomes fully robotized.
ISSN:1865-1704
1863-4613
DOI:10.1007/s12232-023-00419-6