To rationalize a substantial income share of labor despite progressive task automation over the centuries, we present a simple model in which demand moves along a vertically differentiated production structure toward goods of increasing sophistication. Automation of more sophisticated goods...

There are many well documented behavioral biases in financial markets. Yet, analyzing U.S. equities reveals that less than 1.21% of returns are predictable in recent years. Given the high number of biases, why are returns not more predictable? We provide two pieces of new evidence for one...