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Robots Are Us: Some Economics of Human Replacement

Author

Listed:
  • Seth G. Benzell
  • Laurence J. Kotlikoff
  • Guillermo Lagarda Cuevas
  • Jeffrey D. Sachs

Abstract

Will smart machines replace humans like the internal combustion engine replaced horses? If so, can putting people out of work, or at least out of good work, also put the economy out of business? Our model says yes. Under the right conditions, more supply produces, over time, less demand as the smart machines undermine their customer base. Highly tailored skill- and generation-specific redistribution policies can keep smart machines from immiserating our posterity. But blunt policies, such as mandating open-source technology, can make matters worse.

Suggested Citation

  • Seth G. Benzell & Laurence J. Kotlikoff & Guillermo Lagarda Cuevas & Jeffrey D. Sachs, 2017. "Robots Are Us: Some Economics of Human Replacement," IDB Publications (Working Papers) 8590, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:8590
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Prettner, Klaus & Strulik, Holger, 2017. "The lost race against the machine: Automation, education and inequality in an R&D-based growth model," Hohenheim Discussion Papers in Business, Economics and Social Sciences 08-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    2. Lankisch, Clemens & Prettner, Klaus & Prskawetz, Alexia, 2017. "Robots and the skill premium: An automation-based explanation of wage inequality," Hohenheim Discussion Papers in Business, Economics and Social Sciences 29-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    3. Terry Gregory & A.M. Salomons & Ulrich Zierahn, 2016. "Racing With or Against the Machine? Evidence from Europe," Working Papers 16-05, Utrecht School of Economics.
    4. Abeliansky, Ana & Prettner, Klaus, 2017. "Automation and demographic change," Center for European, Governance and Economic Development Research Discussion Papers 310, University of Goettingen, Department of Economics.
    5. Graetz, Georg & Michaels, Guy, 2015. "Robots at Work," CEPR Discussion Papers 10477, C.E.P.R. Discussion Papers.
    6. Jeffrey D. Sachs & Seth G. Benzell & Guillermo LaGarda, 2015. "Robots: Curse or Blessing? A Basic Framework," NBER Working Papers 21091, National Bureau of Economic Research, Inc.
    7. John Hudson, 2016. "What is Wrong with the West’s Economies? An Alternative View," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(1), pages 19-24, August.
    8. Gasteiger, Emanuel & Prettner, Klaus, 2017. "A note on automation, stagnation, and the implications of a robot tax," Discussion Papers 2017/17, Free University Berlin, School of Business & Economics.
    9. repec:nbr:nberch:14010 is not listed on IDEAS
    10. Dominique Méda, 2017. "The Future of work: The meaning and value of work in Europe," Working Papers hal-01616579, HAL.
    11. Ajay Agrawal & Joshua S. Gans & Avi Goldfarb, 2018. "Prediction, Judgment, and Complexity: A Theory of Decision Making and Artificial Intelligence," NBER Chapters,in: The Economics of Artificial Intelligence: An Agenda National Bureau of Economic Research, Inc.
    12. Gasteiger, Emanuel & Prettner, Klaus, 2017. "On the possibility of automation-induced stagnation," Hohenheim Discussion Papers in Business, Economics and Social Sciences 07-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.

    More about this item

    Keywords

    labor supply; economic aspects; technological change; Innovation; Robots; Labor Replacement; Automation; Growth; Intergenerational Transfers; OLG; Smart Technologies; Capital Stocks; Welfare;

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L17 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Open Source Products and Markets
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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