Are robots taking over the world economy? Life imitates art, and as robotic technology becomes more sophisticated, robots could soon become perfect substitutes for human labor.
In this podcast, IMF economist Andy Berg says the robot revolution could lead to greater inequality. Berg is coauthor of Robots, Growth, and Inequality published in the September 2016 edition of Finance & Development magazine.
Technology drives growth. Now, the average American worker works 17 weeks to attain the same standard of living that a worker in 1915 would have had to work a year to get. And that's mainly why we're richer overall.
What happens in an economy in which suddenly you introduce this capital (robots) that is productive enough to compete with humans? Berg and his co-authors find in that economy, robots take over. The good news is productivity increases, the bad news is wages fall.
Which brings us to the rise in inequality. It's a scary picture, according to Berg. Inequality will rise because the owners of robots (capital) will make most of the money and do virtually all the consumption.
You can listen to the interview here:
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