From secular stagnation to robocalypse? Implications of demographic and technological changes

Demographic change and automation are two major structural trends that will shape the macroeconomy in the coming decades. We present a general equilibrium model with a tractable lifecycle structure that enables investigation of the main transmission mechanisms through which demography and technology affect economic growth. Owing to a trade-off between innovation and automation, lower fertility and population ageing lead to reductions in GDP per capita growth and the labour income share. During the demographic transition, the extent growth and factor shares are affected depends on alternative labour market configurations and scenarios for the integration of robots into economic activity. (C) 2020 Elsevier B.V. All rights reserved.