A Note on Economic Growth and Labor Automation

Pang, Ziyun (2022): A Note on Economic Growth and Labor Automation.

Abstract

This paper analyzes the relationship between labor automation and economic growth. I build a task-based framework and utility to evaluate how labor automation range can maximize economy in different conditions. I also analyze relationships among labor automation, capital, consumption, and investment. I considered the fact that automation will be expanded due to technological advancements while labor tends to obtain new skills to be more competitive. The best labor automation depends on labor productivity and machine productivity. When labor productivity exceeds machine productivity, labor automation will be less than half of the total tasks. In the opposite case, labor automation will be more than half of the total tasks. I also demonstrated that the investment decreases rapidly when workers become more competitive. When disruptive technologies are introduced, consumption will increase sharply together with labor automation, which is consistent with the first conclusion.

• Item Type: MPRA Paper
• Language: English
• Keywords: Labor automation, economic growth, consumption, investment, technology.
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

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