Robots and Labour : Implications for Inflation Dynamics

This summary investigates how robots affect several variables related to labour, and vice versa. In order to evaluate the causal relationship, we use quality-adjusted robot stock data and labour market data from 26 industries in 33 countries. According to the results obtained from three estimated models – cross-sectional regressions in line with previous studies, panel data regressions and structural panel VAR models – an increase in robot stocks results in higher labour productivity, but has only an ambiguous effect on total employment. Wage increases, but not significantly. Thus, to date, robots should not have exerted a significant influence on inflation dynamics. On the other hand, improvements in labour market conditions lead to significant decline in robot investment. An important lesson obtained in this summary is that when testing whether robots take jobs away from the human workforce, one must also consider the reverse causality from the labour market to robots. Full Publication: "https://ssrn.com/abstract=3575884" Inflation Dynamics in Asia and the Pacific