Publication Type
Working Paper
Version
publishedVersion
Publication Date
12-2019
Abstract
We study the effects of introducing two different types of robots (additive and multiplicative) in an infinitely lived one-sector aggregative model with malleable capital on wages. The wage effects of these two polar cases are dramatically different. Given malleable capital that can be retrofitted for use either as conventional machines or as robots, we show that when it is profitable for firms to adopt additive robots in the production process, the real wage drops on impact and remains permanently at the lower level even as total malleable capital accumulates. However, when multiplicative robots are adopted, we show that while the immediate impact on the real wage is ambiguous, the real wage enjoys a positive trend growth even in the absence of steady technological progress.
Discipline
Economics
Research Areas
Applied Microeconomics
First Page
1
Last Page
22
Publisher
SMU Economics and Statistics Working Paper Series, Paper No. 21-2019
Citation
HOON, Hian Teck.
Growth Effects of Additive and Multiplicative Robots Alongside Conventional Machines. (2019). 1-22.
Available at: https://ink.library.smu.edu.sg/soe_research/2327
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.