## Should We Fear the Robot Revolution? (The Correct Answer is Yes)

_IMF Working Papers, May 21, 2018_

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## Bibliographic details
- Authors: Andrew Berg, Edward F Buffie, Luis-Felipe Zanna
- Published: May 21, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484300831.001

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### Summary
- Authors: Andrew Berg, Edward F Buffie, Luis-Felipe Zanna
- Date: May 21, 2018
- Series: Working Paper No. 2018/116
- Pages: 61
- DOI: https://doi.org/10.5089/9781484300831.001
- Core summary: Advances in artificial intelligence and robotics may constitute a “second industrial revolution.” The paper analyzes implications for inequality and output using a model with two key assumptions: (1) “robot” capital is distinct from traditional capital in its degree of substitutability with human labor; and (2) only capitalists and skilled workers save. A range of model variants reflecting different views of automation’s labor-market effects is analyzed.

### Model structure and assumptions
- Distinct capital types:
  - “Robot” capital is modeled as distinct from traditional capital by its degree of substitutability with human labor.
- Saving behavior:
  - Only capitalists and skilled workers save.
- Variants:
  - The analysis includes a range of model variants to reflect widely different views of how automation may transform the labor market.

### Main findings and analysis
- Core result:
  - Automation is good for growth and bad for equality.
- Real wage dynamics:
  - In the benchmark model real wages fall in the short run and eventually rise, but “eventually” can easily take generations.
- Robustness:
  - The main results are described as surprisingly robust across the range of model variants examined.

### Subject areas and keywords
- Subject: Labor, Real wages, Robotics, Technology, Wage adjustments, Wages
- Keywords: growth, income distribution., labor service, low-skill wage, market-clearing wage, per capita income, real wage, Real wages, Robotics, robots, Technological change, Wage adjustments, wage growth, wage income, wage inequality, Wages, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2018/05/21/should-we-fear-the-robot-revolution-the-correct-answer-is-yes-44923_