We analyze the long-run growth effects of automation in the canonical overlapping generations framework. While … automation implies constant returns to capital within this model class (even in the absence of technological progress), we show … that it does not have the potential to lead to positive long-growth. The reason is that automation suppresses wages, which …

This paper examines the implications of automation capital in a Solow growth model with two types of labour. We study … the transition from standard production to production using automation capital which substitutes low-skilled workers. We …-skilled labour and are not automatable. We show that under these assumptions, automation capital does not generate endogenous growth …