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Automation, population aging, and growth

Romero Molina, Alfred LU (2017) NEKN01 20171
Department of Economics
Abstract
In this paper we analyze the effects that automation and population aging exert on economic growth. We do that by means of an Overlapping Generations Model (Diamond, 1965) in which automation capital is taken into account in the production structure of the economy. The framework we use was first created by Gasteiger and Prettner (2017) and we further develop it by adding a new feature: a pay-as-you-go pension system. The model predicts that automation could produce the collapse of the economy if the latter and labour are perfect substitutes. However, after simulating seven different scenarios, we find that restricting the amount of investment in automation and ensuring a stable or growing population, long-run growth can be achieved.
Popular Abstract
In this paper we analyze the effects that automation and population aging exert on economic growth. We do that by means of an Overlapping Generations Model (Diamond, 1965) in which automation capital is taken into account in the production structure of the economy. The framework we use was first created by Gasteiger and Prettner (2017) and we further develop it by adding a new feature: a pay-as-you-go pension system. The model predicts that automation could produce the collapse of the economy if the latter and labour are perfect substitutes. However, after simulating seven different scenarios, we find that restricting the amount of investment in automation and ensuring a stable or growing population, long-run growth can be achieved.
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author
Romero Molina, Alfred LU
supervisor
organization
course
NEKN01 20171
year
type
H1 - Master's Degree (One Year)
subject
keywords
automation, population aging, economic growth, PAYGO pension system, Overlapping Generations Model
language
English
id
8911132
date added to LUP
2017-07-10 13:53:04
date last changed
2017-07-10 13:53:04
@misc{8911132,
  abstract     = {In this paper we analyze the effects that automation and population aging exert on economic growth. We do that by means of an Overlapping Generations Model (Diamond, 1965) in which automation capital is taken into account in the production structure of the economy. The framework we use was first created by Gasteiger and Prettner (2017) and we further develop it by adding a new feature: a pay-as-you-go pension system. The model predicts that automation could produce the collapse of the economy if the latter and labour are perfect substitutes. However, after simulating seven different scenarios, we find that restricting the amount of investment in automation and ensuring a stable or growing population, long-run growth can be achieved.},
  author       = {Romero Molina, Alfred},
  keyword      = {automation,population aging,economic growth,PAYGO pension system,Overlapping Generations Model},
  language     = {eng},
  note         = {Student Paper},
  title        = {Automation, population aging, and growth},
  year         = {2017},
}