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Fragile robots, economic growth and convergence

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  • Klarl, Torben

Abstract

Technological progress leads to the development of robots that are more error-prone and fragile than their predecessors. Consequently, utilizing the existing automation capital stock is associated with higher wear and tear, CPU overload, communication downtime, and, ultimately, increased depreciation costs. This, in turn, affects new future investments. Considering a growth model with physical and automation capital utilization, we argue that utilized automation capital, not the automation capital stock, is a perfect substitute for labor in a fully automated society. We show that it is not necessarily the introduction of capital utilization alone, but rather the relationship between the elasticities of the utilization of automation and physical capital that slows the convergence speed in a model that reflects an automated society.

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  • Klarl, Torben, 2022. "Fragile robots, economic growth and convergence," Economic Modelling, Elsevier, vol. 112(C).
    • Handle: RePEc:eee:ecmode:v:112:y:2022:i:c:s0264999322000967
    DOI: 10.1016/j.econmod.2022.105850
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    More about this item

    Keywords

    Automation; Capital utilization; Perpetual economic growth;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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