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Citation link: https://doi.org/10.26092/elib/209
00107733-1.pdf
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The implications of automation for economic growth when investment decisions are irreversible


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Authors: Klarl, Torben  
Other Authors: Antony, Jürgen
Editors: Cordes, Christian  
Fornahl, Dirk  
Günther, Jutta  
Heinemann, André W. 
Klarl, Torben  
Publisher: Institute for Economic Research and Policy (IERP) 
Abstract: 
This paper discusses automation embedded into a standard growth model without exogenous growth when investment decisions for physical and automation capital are irreversible. The imposed nonnegativity constraints on physical and automation capital induces an imbalance effect between the growth rate of output and the fraction between physical and automation capital. The paper shows that this imbalance effect leads (i) to transitional dynamics off the steady state while (ii) retaining perpetual growth of the AK style in the steady state without exogenous technological progress. We also show that the resulting transition path does not have to be on the saddle path of the system without the nonnegativity constraints.
Keywords: Automation, perpetual economic growth, irreversibility of investment decisions
Issue Date: 2019
Journal/Edited collection: Bremen Papers on Economics & Innovation 
Pages: 13
Type: Artikel/Aufsatz
ISSN: 2629-3994
Secondary publication: no
DOI: 10.26092/elib/209
URN: urn:nbn:de:gbv:46-00107733-11
Institution: Universität Bremen 
Faculty: Fachbereich 07: Wirtschaftswissenschaft (FB 07) 
Institute: IERP - Institute for Economic Research and Policy 
Appears in Collections:Forschungsdokumente

  

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