This paper examines the effects of labor-replacing capital, which we call robots, on business cycle dynamics using a New Keynesian model with a role for both traditional and robot capital. We find that shocks to the price of robots have effects on output, employment, wages, and labor's share of...

Shimer (2015) argues that a search and matching model of the labor market in which wage is determined by Nash bargaining cannot generate the observed volatility in unemployment and vacancy in response to reasonable labor productivity shocks. This paper examines how incorporating monopolistically...

Shimer (2015) argues that a search and matching model of the labor market in which wage is determined by Nash bargaining cannot generate the observed volatility in unemployment and vacancy in response to reasonable labor productivity shocks. This paper examines how incorporating monopolistically...