Should We Fear the Robot Revolution? (The Correct Answer is Yes)

By Andrew Berg, Edward F Buffie, Luis-Felipe Zanna

May 21, 2018

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Format: Chicago

Andrew Berg, Edward F Buffie, and Luis-Felipe Zanna. Should We Fear the Robot Revolution? (The Correct Answer is Yes), (USA: International Monetary Fund, 2018) accessed September 27, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We may be on the cusp of a “second industrial revolution” based on advances in artificial intelligence and robotics. We analyze the implications for inequality and output, using a model with two assumptions: “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.

Subject: Labor, Real wages, Robotics, Technology, Wage adjustments, Wages

Keywords: Growth, Income distribution., Labor service, Low-skill wage, Market-clearing wage, Per capita income, Real wage, Real wages, Robotics, Robots, Technological change, Wage adjustments, Wage growth, Wage income, Wage inequality, Wages, WP

Publication Details

Pages:

61
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/116
Stock No:

WPIEA2018116
ISBN:

9781484300831
ISSN:

1018-5941

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