The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality
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The Rise of the Machines : Automation, Horizontal Innovation, and Income Inequality. / Hémous, David; Olsen, Morten Graugaard.
I: American Economic Journal: Macroeconomics, Bind 14, Nr. 1, 01.2022, s. 179-223.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - The Rise of the Machines
T2 - Automation, Horizontal Innovation, and Income Inequality
AU - Hémous, David
AU - Olsen, Morten Graugaard
PY - 2022/1
Y1 - 2022/1
N2 - We build an endogenous growth model with automation (the replacement of low-skill workers with machines) and horizontal innovation (the creation of new products). Over time, the share of automation innovations endogenously increases through an increase in low-skill wages, leading to an increase in the skill premium and a decline in the labor share. We calibrate the model to the US economy and show that it quantitatively replicates the paths of the skill premium, the labor share, and labor productivity. Our model offers a new perspective on recent trends in the income distribution by showing that they can be explained endogenously.
AB - We build an endogenous growth model with automation (the replacement of low-skill workers with machines) and horizontal innovation (the creation of new products). Over time, the share of automation innovations endogenously increases through an increase in low-skill wages, leading to an increase in the skill premium and a decline in the labor share. We calibrate the model to the US economy and show that it quantitatively replicates the paths of the skill premium, the labor share, and labor productivity. Our model offers a new perspective on recent trends in the income distribution by showing that they can be explained endogenously.
U2 - 10.1257/mac.20160164
DO - 10.1257/mac.20160164
M3 - Journal article
VL - 14
SP - 179
EP - 223
JO - American Economic Journal: Macroeconomics
JF - American Economic Journal: Macroeconomics
SN - 1945-7707
IS - 1
ER -
ID: 291012971