Looking Ahead at the Effects of Automation in an Economy with Matching Frictions

We look at how advances in AI and Robotics will affect employment an economy with matching frictions endogenous job destruction. In the model, tasks can be produced by workers or machines. Workers have a comparative advantage producing advanced but machines tend to catch up labor, leading automation. To calibrate we rely on predictions literature about expected share of automated jobs due Robotics. Our model suggests that these technological innovations raise destruction also creation because prospect automating increases value hiring workers. Therefore, long-run might fall not massively. Furthermore, likely rise if consumers human interactions ( touch ) as relative price labor widespread usage Regarding policy, compare outcomes robot tax alternative policies.