Prof. Dr. Torben Klarl has published a new paper with the title "Fragile robots, economic growth and convergence" in the prestigious journal Economic Modelling. The article shows that technological progress leads to the development of robots that are more error-prone and fragile than their predecessors. Consequently, utilizing the existing automation capital stock is associated with higher wear and tear, CPU overload, communication downtime, and, ultimately, increased depreciation costs. This, in turn, affects new future investments. Considering a growth model with physical and automation capital utilization, the authors argue that utilized automation capital, not the automation capital stock, is a perfect substitute for labor in a fully automated society. They show that it is not necessarily the introduction of capital utilization alone, but rather the relationship between the elasticities of the utilization of automation and physical capital that slows the convergence speed in a model that reflects an automated society.
