Perpetual growth, distribution, and robots
Önder Nomaler & Bart Verspagen
#2018-023
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".
Keywords: perpetual economic growth, economic effects of robots, income
distribution
JEL Classification: O41, O33, E25, P17