Modeling Automation

Daron Acemoglu, Pascual Restrepo

NBER Working Paper No. 24321
Issued in February 2018
NBER Program(s):Economic Fluctuations and Growth, Labor Studies

This paper points out that modeling automation as factor-augmenting technological change has several unappealing implications. Instead, modeling it as the process of machines replacing tasks previously performed by labor is both descriptively realistic and leads to distinct and empirically plausible predictions. In contrast to factor-augmenting technological change, the substitution of machines for labor in additional tasks always reduces the labor share in national income and can reduce the equilibrium wage (for realistic parameter values). This approach to automation also enables a discussion of several new forces at work, including the introduction of new tasks, changes in the comparative advantage of labor relative to capital, the deepening of automation (whereby machines become more productive in tasks that are already automated), and the role of the elasticity of substitution and capital accumulation in the long-run adjustment of the economy.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w24321

Published: Daron Acemoglu & Pascual Restrepo, 2018. "Modeling Automation," AEA Papers and Proceedings, vol 108, pages 48-53.

Users who downloaded this paper also downloaded* these:
Bryan, Choi, and Karlan w24278 Randomizing Religion: The Impact of Protestant Evangelism on Economic Outcomes
Acemoglu and Restrepo w24196 Artificial Intelligence, Automation and Work
Auclert and Rognlie w24280 Inequality and Aggregate Demand
Acemoglu and Restrepo w23285 Robots and Jobs: Evidence from US Labor Markets
De Loecker and Eeckhout w23687 The Rise of Market Power and the Macroeconomic Implications
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us