The current literature on the economic effects of machine learning, robotisation and artificial intelligence suggests that there may be an upcoming wave of substitution of human labour by machines (including software). We take this as a reason to rethink the traditional ways in which technological change has been represented in economic models. In doing so, we contribute to the recent literature on so-called perpetual growth, i.e., growth of per capita income without technological progress. When technology embodied in capital goods are sufficiently advanced, per capita growth becomes possible with a non-progressing state of technology. We present a simple Solow-like growth model that incorporates these ideas. The model predicts a rising wage rate but declining share of wage income in the steady state growth path. We present simulation experiments on several policy options to combat the inequality that results from this, including a universal basic income as well as an option in which workers become owners of "robots".
|Place of Publication||Maastricht|
|Number of pages||23|
|Publication status||Published - 17 May 2018|
|Name||UNU-MERIT Working Papers|
- perpetual economic growth
- economic effects of robots
- income distribution