Simulating Endogenous Global Automation / Seth G. Benzell, Laurence J. Kotlikoff, Guillermo LaGarda, Victor Yifan Ye.

Format:

Book

Author/Creator:

Benzell, Seth G.

Contributor:

National Bureau of Economic Research.

Kotlikoff, Laurence J.

LaGarda, Guillermo.

Ye, Victor Yifan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29220.

NBER working paper series no. w29220

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

This paper develops a 17-region, 3-skill group, overlapping generations, computable general equilibrium model to evaluate the global consequences of automation. Automation, modeled as capital- and high-skill biased technological change, is endogenous with regions adopting new technologies when profitable. Our approach captures and quantifies key macro implications of a range of foundational models of automation. In our baseline scenario, automation has a moderate effect on regional outputs and a small effect on world interest rates. However, it has a major impact on inequality, both wage inequality within regions and per capita GDP inequality across regions. We examine two policy responses to technological change -- mandating use of the advanced technology and providing universal basic income to share gains from automation. The former policy can raise a region's output, but at a welfare cost. The latter policy can transform automation into a win-win for all generations in a region.

Notes:

Print version record

September 2021.