The benefits of new technologies accrue not only to high-skilled labor but also to owners of capital in the form of higher capital incomes. This increases income and wealth inequality.
New version of our work with @LukaszRachel and @pascualrpo and summary thread 👇
New version of our work with @LukaszRachel and @pascualrpo and summary thread 👇
https://twitter.com/LukaszRachel/status/1358916119071965184
Coincidentally this @voxdotcom "Billionaires Explained" show has a pretty good intuitive version of our theory netflix.com/watch/81097618 (from minute 8:00), there explained by @JeffDSachs.
It's also worth adding that standard theories predict exactly the opposite, namely that (in the long-run) all benefits of automation accrue to labor in the form higher wages.
See for example aeaweb.org/articles?id=10… and the 2019 ERP govinfo.gov/content/pkg/ER…
See for example aeaweb.org/articles?id=10… and the 2019 ERP govinfo.gov/content/pkg/ER…
The logic of that argument and why we think it's wrong is discussed in more detail in the paper:
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