Macro Roundup

Daron Acemoğlu and Pascual Restrepo, "The race between machines and humans: Implications for growth, factor shares and jobs," Center for Economic and Policy Research, July 5, 2016, https://voxeu.org/article/job-race-machines-versus-humans
Daron Acemoğlu and Pascual Restrepo, "Robots and Jobs: Evidence from US Labor Markets,"National Bureau of Economic Research, July 16, 2018, https://economics.mit.edu/files/15254Daron Acemoğlu and Pascual Restrepo, "Robots and jobs: Evidence from the US," Center for Economic and Policy Research, April 10, 2017, https://voxeu.org/article/robots-and-jobs-evidence-usDaron Acemoğlu and Pascual Restrepo, "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," National Bureau of Economic Research, June 2017, https://www.nber.org/papers/w22252Daron Acemoğlu and Pascual Restrepo, "Automation and New Tasks: How Technology Displaces and Reinstates Labor," National Bureau of Economic Research, March 5, 2019, https://www.nber.org/papers/w25684Daron Acemoğlu and Pascual Restrepo, "Demographics and Automation," National Bureau of Economic Research, March 2018, http://www.nber.org/papers/w24421Daron Acemoğlu and Pascual Restrepo, "Artificial Intelligence, Automation and Work," National Bureau of Economic Research April 19, 2018, https://economics.mit.edu/files/14641
Daron Acemoğlu and Pascual Restrepo, "Low Skill and High Skill Automation,"Journal of Human Capital, 2018, https://economics.mit.edu/files/15118Core of Restrepo's argument, evidence based, as long as the rate of automation of jobs by machines and the creation of new complex tasks for workers are balanced, there will be no major labor market decline, parallels your analogy that you won't automate farms if you can't move workers to higher productivity sectors so they will be able to buy the corn

"...The stabilising forces in the model stem from ‘price effects’. Because automation tends to reduce payments to labour, it also increases the profitability of the creation of new complex tasks relative to further automation. This stabilising force implies that rapid automation tends to self-correct itself, provided that it takes place within an environment in which the technology for creating future innovations and R&D of different types remains unchanged.Under these circumstances, the economy will ultimately return back to its state before the arrival of these automation technologies. If so, the current difficulties of workers in the face of new technologies notwithstanding, the future may not be bleak for labour. Nevertheless, this stabilising force does not imply that all sorts of changes will necessarily reverse themselves.If what has changed is the technology for creating future innovations, and in particular, if automation-related innovations have become easier than creating new tasks, then the wave of new automation technologies we are now seeing will be just the first stage before the economy settles into a new long-run equilibrium with worse prospects for labour. Overall, the extent to which the future will validate concerns about rising technological non-employment will depend on whether we are witnessing a period of rapid discovery of new automation technologies or a fundamental shift in how we are able to produce technologies for the future...."
The race between machines and humans: Implications for growth, factor shares and jobs

Concerns that new digital technologies, artificial intelligence, and robotics will create widespread technological non-employment are now widespread. Various recent labour market trends, ranging from declines in US labour force participation to increases in wage inequality and the share of capital in national income, are seen as harbingers of this new normal (e.g. Brynjolfsson and McAfee 2012, Akst 2014, Autor 2015, Karabarbounis and Neiman 2014, Oberfield and Raval 2014). A major shortcoming of the typical arguments about technological non-employment is that there is no clear reason why the effect of new technologies will be different this time than in the past, when they did not create such widespread reductions in employment.

It is not that new technologies weren’t predicted to be equally calamitous. John Maynard Keynes stated in 1930:

“We are being afflicted with a new disease of which some readers may not have heard the name, but of which they will hear a great deal in the years to come — namely, technological unemployment.” (Keynes 1930).

In 1965, economic historian Robert Heilbroner confidently asserted:

“As machines continue to invade society, duplicating greater and greater numbers of social tasks, it is human labour itself — at least, as we now think of ‘labour’ — that is gradually rendered redundant." (quoted in Akst 2014).

The famous economist, Wassily Leontief, was equally pessimistic about the implications of new machines. By drawing an analogy with the technologies of the early 20th century that made horses redundant, he speculated that:

“Labour will become less and less important… More and more workers will be replaced by machines. I do not see that new industries can employ everybody who wants a job” (Leontief 1952).

So why did these previous dire predictions not come true? And why should it be different this time?

Our recent work attempts to answer these questions (Acemoglu and Restrepo 2016). Our approach is built on two key ideas. First, during most times, there is a continuous process of tasks previously performed by labour being mechanised and automated, while at the same time, new employment opportunities for labour are created. Second, new employment opportunities come mostly from the introduction of new and more complex tasks in which labour has a comparative advantage relative to capital. Herein lies our answer to Leontief's puzzle - the difference between human labour and horses is that humans have a comparative advantage in new and more complex activities. Horses did not.

The importance of these new complex tasks is well illustrated by the technological and organisational changes during the Second Industrial Revolution, which involved not only the replacement of the stagecoach by the railroad, sailboats by steamboats, and of manual dock workers by cranes, but also the creation of new labour-intensive tasks. These new tasks generated jobs for a new class of engineers, machinists, repairers, and conductors, as well as of modern managers and financiers involved with the introduction and operation of new technologies (e.g. Landes 1969, Chandler 1977, Mokyr 1990).

The importance of new complex tasks can also be seen in recent US labour market dynamics. Employment figures document not just the automation of existing labour-intensive jobs, but also the rise of new occupations, ranging from engineering and programming jobs to those performed by audio-visual specialists, executive assistants, data administrators and analysts, meeting planners, or computer support specialists. Indeed, during the last 30 years, new tasks and new job titles account for a large fraction of US employment growth. To document this fact, we use data from Lin (2011) that measures the share of new job titles — in which workers perform newer tasks than those employed in more traditional jobs — within each occupation. In 2000, about 70% of the workers employed as computer software developers (an occupation employing one million people at the time) held new job titles. Similarly, in 1990 a radiology technician and in 1980 a management analyst were new job titles.
Figure 1 shows that for each decade since 1980, employment growth has been greater in occupations with more new job titles. The regression line shows that occupations with 10 percentage points more new job titles at the beginning of each decade grow 5.05% faster over the next ten years (standard error = 1.3%). From 1980 to 2007, total employment in the US grew by 17.5%. About half (8.84%) of this growth is explained by the additional employment growth in occupations with new job titles, relative to a benchmark category with no new job titles.1

These two key building blocks imply that one should consider the dynamics of modern labour markets in advanced economies as being characterised by a race between two technological forces: automation on the side of machines, and the creation of new complex tasks on the side of man. While automation is an ongoing process which, all else equal, takes jobs away from labour, the creation of new complex tasks is also an ongoing process which adds new jobs for labour. If the first force outpaces the second, there will be a declining share of labour in national income and technological non-employment. If the second force outpaces the first, the reverse will happen - there will be a greater share of labour in national income and rising employment. Our task-based framework further shows that automation, though it corresponds to a technological improvement and increases GDP, may also reduce the real wages of workers, not just their share in national income. This last result is relevant for understanding a key pillar of the concerns about the effect of new technology on wages, which is generally hard to reconcile with existing models (in which technological improvements always increase wages).

Viewed from the perspective of our theoretical framework, the reason why illustrious commentators of the past, including Keynes and Leontief, did not turn out to be right is that the second force in the race between machine and man was every bit the first one’s equal. Looking into the future, whether the wave of new technologies will spell doom for labour will similarly depend on whether this second force can keep up with the increased pace of the first.

But in this framework, leaving as exogenous the rates at which automation and the creation of new complex tasks proceed is not fully satisfactory. Though it helps us understand the forces at work, it poses an equally deep question: Why was it that in the past the two forces turned out to be balanced? Is there any reason why we should expect the same from today’s technological developments?

To answer this even more fundamental question, we develop the full version of our framework in which the rates at which automation and the creation of new complex tasks proceed is endogenised, and responds to whichever of these two activities are more profitable. For example, the cheaper capital is, the more profitable automation is, which replaces the relatively expensive labour with cheaper capital. In the endogenous technology version of the model, this greater profitability triggers further automation. This conceptual structure is useful for two related reasons. First, it helps us identify the forces that act as stabilisers — so that once automation pulls ahead of the creation of new labour-intensive tasks, there will be economic forces that induce a faster creation of new tasks as well. Second, it helps us delineate conditions under which the torrent of new automation technologies that we are currently witnessing will not self-correct and will thus have long-term adverse consequences for the prospects of labour.

The stabilising forces in the model stem from ‘price effects’. Because automation tends to reduce payments to labour, it also increases the profitability of the creation of new complex tasks relative to further automation. This stabilising force implies that rapid automation tends to self-correct itself, provided that it takes place within an environment in which the technology for creating future innovations and R&D of different types remains unchanged. Under these circumstances, the economy will ultimately return back to its state before the arrival of these automation technologies. If so, the current difficulties of workers in the face of new technologies notwithstanding, the future may not be bleak for labour. Nevertheless, this stabilising force does not imply that all sorts of changes will necessarily reverse themselves. If what has changed is the technology for creating future innovations, and in particular, if automation-related innovations have become easier than creating new tasks, then the wave of new automation technologies we are now seeing will be just the first stage before the economy settles into a new long-run equilibrium with worse prospects for labour. Overall, the extent to which the future will validate concerns about rising technological non-employment will depend on whether we are witnessing a period of rapid discovery of new automation technologies or a fundamental shift in how we are able to produce technologies for the future.

We also highlight a new implication of our conceptual structure regarding the efficiency of the market equilibrium. It is well-known that models with endogenous technology have various sources of inefficiencies resulting from monopoly markups charged by firms with market power (which are typically those firms that introduce new products and technologies to the market). In addition to these well-known sources of inefficiency, we identify a new type of inefficiency, which leads to too much automation and too few new complex tasks being created. This inefficiency arises because automation, which enables firms to economise on wage payments, responds to high wages. When some of the wage payments accruing to workers are rents (e.g. efficiency wages or quasi-rents created by labour market frictions), there will be more automation than what the social planner would desire, and technology becomes inefficiently biased towards replacing labour.

Finally, we use our framework to explore the implications of automation for inequality. When different workers have different amounts of skills, both automation and the creation of new tasks may lead to greater inequality — in the first case, because machines compete more strongly against less skilled labour; and in the second, because the more skilled workers have greater competitive advantage than the less skilled in new complex tasks. However, we show that as long as over time, tasks become standardised and are more easily performed by less skilled labour (e.g. as in Acemoglu et al. 2010), the introduction of new complex tasks benefits those workers as well as the more skilled ones. Depending on how rapidly this standardisation process takes place, the economy might generate powerful forces self-correcting the inequality implications of automation technologies as well.

We view our work as a first step towards a systematic investigation of different types of technological changes that impact capital and labour differentially. Several areas of research appear fruitful based on this step. First, a more systematic analysis of the efficiency implications and how this interplays with different types of labour market imperfections (which create wedges between the opportunity cost of labour and wages) is an important area for future work. Second, a richer analysis of tasks at different parts of the complexity distribution being automated is an important area for research, especially in light of much evidence that automation will affect not just low-skilled but increasingly also high-skilled workers in the near future. Third, since there may be major differences in the ability of technology to automate and also to create new tasks across industries (e.g. Polanyi 1966, Autor et al. 2003), the extent to which these differences become constraining factors needs to be investigated. Finally, and most importantly, there is great need for empirical evidence on the impact of automation and robotics on employment. Indeed, whether rapid automation does act as an impetus for the creation of new complex tasks is of the utmost importance to provide greater empirical content to the framework developed here. Daron Acemoğlu and Pascual Restrepo, "The race between machines and humans: Implications for growth, factor shares and jobs," Center for Economic and Policy Research, July 5, 2016, https://voxeu.org/article/job-race-machines-versus-humans
You've read this, contradictory to their theoretical model finds that, "... one more robot per thousand workers reduces the employment to population ratio by about 0.2 percentage points and wages by 0.37 percent..."however they suspect it's a short term thing, and only at the margins. "... As robots and automation technologies take over tasks performed by labor, there is increasing concern about the future of jobs and wages. We analyze the effect of the increase in industrial robot usage between 1990 and 2007 on US labor markets. Using a model in which robots compete against human labor in the production of tasks, we show that advances in robotics technology may reduce employment and wages, and that the local labor market impacts of robots can be estimated by regressing the change in employment and wages on the exposure to robots in each local labor market—defined from advances in robotics technology in each industry and the local distribution of employment across industries. Using this approach, we estimate robust negative effects of robots on employment and wages across commuting zones. We bolster this evidence by showing that the commuting zones most exposed to robots in the post-1990 era do not exhibit any differential trends before 1990. The impact of robots is distinct from the effects of overall productivity increases, other types of IT capital and the total capital stock. According to our estimates, one more robot per thousand workers reduces the employment to population ratio by about 0.2 percentage points and wages by 0.37 percent....Overall, our summary of the quantitative magnitudes implied by our analysis is that one more robot reduces employment in a commuting zone with the average exposure to robots by 6.2 workers and one more robot per thousand employees reduce wages in such a commuting zone by about 0.73 percent (relative to a commuting zone with no exposure). Translating this into aggregate effects requires a range of assumptions, and our best-case range puts these aggregate effects between 3 and 5.6 workers losing their jobs as a result of the introduction of one more robot in the national economy, and wages declining between 0.25 percent to 0.5 percent as a result of one more robot per thousand employees."..."Daron Acemoğlu and Pascual Restrepo, "Robots and Jobs: Evidence from US Labor Markets,"National Bureau of Economic Research, July 16, 2018, https://economics.mit.edu/files/15254Good blog post on the "Robots and Jobs" paper putting it's findings into context, just a rounding error in the grand arch of things"....We believe as well that the negative effects we estimate are both interesting and surprising, because of the small offsetting employment increases in other industries and occupations. So far, there are relatively few robots in the US economy, and so the number of jobs lost due to robots has been limited to between 360,000 and 670,000 jobs. If the robots spread as predicted, future aggregate job losses will be much larger. For example, BCG (2015) has an 'aggressive' scenario in which the world stock of industrial robots would quadruple by 2025. In our estimates, that would imply a 0.94-1.76 percentage points lower employment to population ratio, and 1.3-2.6% lower wage growth between 2015 and 2025. These are sizable effects. But it should also be noted that even under the most aggressive scenario, we are talking about a relatively small fraction of employment in the US economy being affected by robots.There is nothing here to support the view that new technologies will make most jobs disappear and humans largely redundant...."Robots and jobs: Evidence from the US “We are being afflicted with a new disease of which some readers may not have heard the name, but of which they will hear a great deal in the years to come," John Maynard Keynes wrote almost a century ago, "namely, technological unemployment.”
(Keynes 1930)

If Keynes' original readers found those worries were misplaced, today there is concern that these gloomy predictions may soon come true (Brynjolfsson and McAfee 2012, Ford 2016). Bolstering such concerns, a range of low-skill and medium-skill occupations exposed to automation have suffered employment declines and sluggish or even negative wage growth (Autor et al. 2003, Goos and Manning 2007, Michaels et al. 2014).

Plenty of research speculates on what might happen when the robots arrive. Frey and Osborne (2013), classified occupations by how susceptible they are to automation and concluded that 47% of US workers are at risk in the next 20 years. McKinsey (2016) claims the same statistic is 45%, and The World Bank estimates that this number for the OECD as a whole is 57% of workers. Arntz et al. (2016), however, disagree. They argue that, within an occupation, many workers specialise in tasks that cannot be automated easily, and so their estimate for OECD jobs at risk is only 9%.

Whether 9% or 57% or jobs are at risk, there is no guarantee that firms would replace those workers with robots. That would depend on the costs of automation, and how much wages change in response to this threat. Additionally, even if an industry introduces robots to do specific jobs, productivity improvements may create new jobs in the firm, or other occupations might be able to expand.

Research

In Research, we go beyond these feasibility studies, and estimate what is already happening due to the introduction of robots (Acemoglu and Restrepo 2017). We investigate the equilibrium impact of industrial robots in local US labour markets. These machines are defined by The International Federation of Robotics as “an automatically controlled, reprogrammable, and multipurpose” (IFR 2014; see also Graetz and Michaels, 2015). Industrial robots are fully autonomous machines that can be programmed to perform several manual tasks such as welding, painting, assembling, handling materials, or packaging. This definition excludes other types of capital, such as software, that may also replace labour, and machines designed for a single function, such as cranes, circuit printers, textile looms or coffee machines.

In 2007 there were four times as many industrial robots in the US and Western Europe as in 1993 (Figure 1). The IFR estimates that there are currently between 1.5 and 1.75 million industrial robots in operation, a number that could increase to 4 to 6 million by 2025 (Boston Consulting Group 2015).
Robot usage is far from evenly spread across the economy. The automotive industry employs 39% of existing industrial robots, followed by the electronics industry (19%), metal products (9%), and the plastic and chemicals industry (9%). Some of these industries were also exposed to import competition from Mexico; whereas Chinese imports and offshoring affected a different set of industries. The actual facts are shown in Figure 2.
Basic theory guiding the empirics

We use a simple model in which robots and workers compete in the production of different tasks (after Acemoglu and Autor 2011, Acemoglu and Restrepo 2016). In this model, the share of tasks performed by robots varies across industries, and there is trade between labour markets specialising in different industries. The model decomposes the aggregate impact on employment and wages into a negative displacement effect on workers who lose their jobs, and a positive productivity effect across the wider economy.

The model also shows that we can summarize the net impact of robots on local labour markets - commuting zones in our application - through a measure of the exposure of these areas to robots. The exposure is defined as the sum over industries of the national penetration of robots into 19 industries, multiplied by the employment share of that industry in that labour market. To compute it, we calculate employment shares by industry in each zone from Census data. Figure 3 shows that US commuting zones differ substantially in their exposure to robots. This variation allows us to estimate the impact of industrial robots on wages and employment in these local labour markets.
When computing our measure of exposure to robots, one concern is that the adoption of robots by US industries might be a response to problems (or opportunities) in these industries or the local economy of commuting zones that house them. To remove the influence of these confounding factors, we focus on the spread of robots coming from advances in technology, which we proxy using the industry-level spread of robots in other advanced economies (this is similar to what Autor et al. 2013 and Bloom et al. 2016 do for the increase in imports from China).

The impact on employment and wages

Our results show a strong relationship between a commuting zone’s exposure to robots and employment. In the areas most exposed to robots, between 1990 and 2007 both employment and wages declined in a robust and significant way. During this period, we estimate that, relative to other areas, the introduction of a new robot per 1,000 workers in a commuting zone reduced the local employment-to-population ratio by 0.37 percentage points and local wages by 0.73%. This is equivalent to 6.2 workers losing their jobs for every robot.

Although these numbers suggest that exposed commuting zones are doing worse than the rest in terms of employment and wages, they do not necessarily reflect the US-wide effects of robots. The adoption of robots in one commuting zone could lower production costs, and via trade, enable other industries to create employment in the rest of the economy. Such indirect benefits would be missed in our cross-sectional comparisons. To account for these gains, we use our model to recompute the impact of robots allowing for trade between commuting zones, and found that the employment and wage effects were smaller - but not by much. The exact impact depends on how easy it was to substitute between goods produced in different places, the cost savings from robots and the elasticity of the local labour supply. Using reasonable estimates for these elasticities and our estimates to discipline the calibration of the remaining parameters in our model, we found that allowing for trade still implies each new robot per thousand workers reduced employment to population ratio by 0.34 percentage points and cut wages by about 0.5% (as opposed to 0.73%). If we further take account of the potential spillovers from reduced employment and wages in industries adopting the robots onto other local non-tradable industries, these numbers might be even smaller: about 0.18 percentage points lower employment to population ratio and 0.25% slower wage growth for every one robot per thousand workers (corresponding to about three workers losing their jobs because of one more robot).

Clearly industrial robots are not the only innovations being implemented at any time, and we might have erroneously attributed to robots the effects of many other technologies that could also displace labour. This is not the case: our results are the same when we control for the increase in overall capital intensity and IT capital by industry. Note also that exposure to robots is only weakly correlated with various other trends. Nor is our measure of exposure to robots related to past trends in employment and wages in the pre-robot era from 1970 to 1990. Indeed, controlling for broad industry composition (shares of manufacturing, durables, construction and so on), for detailed demographics, for exposure to Chinese and Mexican imports, for the decline in routine jobs, and for offshoring opportunities does not change our results.

In the commuting zones most exposed to robots, the employment effect is strongest for routine manual, blue collar, assembly and related occupations, and for workers with less than college education. But no one, it seems, has escaped entirely. Slicing the data by type of employment or education (Figure 2), we find no overall positive impact on any group.
Future impacts

This is only a first step. Alternative strategies for estimating the aggregate implications of the spread of robots and other labour-replacing technologies would complement our approach.

We believe as well that the negative effects we estimate are both interesting and surprising, because of the small offsetting employment increases in other industries and occupations. So far, there are relatively few robots in the US economy, and so the number of jobs lost due to robots has been limited to between 360,000 and 670,000 jobs. If the robots spread as predicted, future aggregate job losses will be much larger. For example, BCG (2015) has an 'aggressive' scenario in which the world stock of industrial robots would quadruple by 2025. In our estimates, that would imply a 0.94-1.76 percentage points lower employment to population ratio, and 1.3-2.6% lower wage growth between 2015 and 2025. These are sizable effects. But it should also be noted that even under the most aggressive scenario, we are talking about a relatively small fraction of employment in the US economy being affected by robots. There is nothing here to support the view that new technologies will make most jobs disappear and humans largely redundant.

Daron Acemoğlu and Pascual Restrepo, "Robots and jobs: Evidence from the US," Center for Economic and Policy Research, April 10, 2017, https://voxeu.org/article/robots-and-jobs-evidence-usNote they assume labor has a comparative advantage in new tasks

"...We examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks, in which labor has a comparative advantage, can be created. In a static version where capital is fixed and technology is exogenous, automation reduces employment and the labor share, and may even reduce wages, while the creation of new tasks has the opposite effects. Our full model endogenizes capital accumulation and the direction of research towards automation and the creation of new tasks. If the long-run rental rate of capital relative to the wage is sufficiently low, the long-run equilibrium involves automation of all tasks. Otherwise, there exists a stable balanced growth path in which the two types of innovations go hand-in-hand. Stability is a consequence of the fact that automation reduces the cost of producing using labor, and thus discourages further automation and encourages the creation of new tasks. In an extension with heterogeneous skills, we show that inequality increases during transitions driven both by faster automation and introduction of new tasks, and characterize the conditions under which inequality is increasing or stable in the long run...."
Daron Acemoğlu and Pascual Restrepo, "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," National Bureau of Economic Growth, June 2017, https://www.nber.org/papers/w22252
framework that implies "automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity"....This paper develops a task-based model to study the effects of different technologies on labor demand.....Our conceptual framework offers several lessons. First, the presumption that all technologies increase (aggregate) labor demand simply because they raise productivity is wrong. Some automation technologies may in fact reduce labor demand because they bring sizable displacement effects but modest productivity gains (especially when substituted workers were cheap to begin with and the automated technology is only marginally better than them). Second, because of the displacement effect, we should not expect au tomation to create wage increases commensurate with productivity growth. In fact, as we noted already, automation by itself always reduces the labor share in industry value added and tends to reduce the overall labor share in the economy (meaning that it leads to slower wage growth than productivity growth). The reason why we have had rapid wage growth and stable labor shares in the past is a consequence of other technologicalchanges that generated new tasks for labor and counterbalanced the effects of automationon the task content of production. Some technologies displaced labor from automatedtasks while others reinstated labor into new ones. On net, labor retained a key role inproduction. By the same token, our framework suggests that the future of work dependson the mixture of new technologies and how these change the task content of production.....At the center of our framework is the task content of production—measuring the allocation of tasks to factors of production. Automation, by creating a displacement effect, shifts the task content of production against labor, while the introduction of new tasks in which labor has a comparative advantage improves it via the reinstatement effect. These technologies are qualitatively different from factor-augmenting ones which do not impact the task content of production.For example, automation always reduces the labor share and may reduce labor demand, and new tasks always increase the labor share.We then show how changes in the task content of production and other contributors to labor demand can be inferred from data on labor shares, value added and factor prices at the industry level.The main implication of our empirical exercise using this methodology is that the recent stagnation of labor demand is explained by an acceleration of automation, particularly in manufacturing, and a deceleration in the creation of new tasks. In addition, and perhaps reflecting this shift in the composition of technological advances, the economy also experienced a marked slowdown in productivity growth, contributing to sluggish labor demand.Our framework has clear implications for the future of work too. Our evidence and conceptual approach support neither the claims that the end of human work is imminent nor the presumption that technological change will always and everywhere be favorable to labor.Rather, it suggests that if the origin of productivity growth in the future continues to be automation, the relative standing of labor, together with the task content of production, will decline. The creation of new tasks and other technologies raising the labor intensity of production and the labor share are vital for continued wage growth commensurate with productivity growth.Whether such technologies will be forthcoming depends not just on our innovation capabilities but also on the supply of different skills, demographic changes, labor market institutions, tax and R&D policies of governments, market competition, corporate strategies and the ecosystem of innovative clusters. We have also pointed out a number of reasons why the balance between automation and new tasks may have become inefficiently tilted in favor of the former, with potentially adverse implications for jobs and productivity and some directions for policy interventions to redress this imbalance.
Daron Acemoğlu and Pascual Restrepo, "Automation and New Tasks: How Technology Displaces and Reinstates Labor," National Bureau of Economic Research, March 5, 2019, https://www.nber.org/papers/w25684Restrepo makes the point that the cure for high prices remains high prices
"We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data,we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show thatdemographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data."

"...In 2018, gross domestic product (GDP) grew at 2.9%, about the Congressional Budget Office’s (CBO’s) projected rate published in 2017 before the tax cut. On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy. Although growth rates cannot indicate the tax cut’s effects on GDP, they tend to rule out very large effects particularly in the short run. Although investment grew significantly, the growth patterns for different types of assets do not appear to be consistent with the direction and size of the supply-side incentive effects one would expect from the tax changes. This potential outcome may raise questions about how much longer-run growth will result from the tax revision.....In April 2018, CBO projected real GDP growth for the calendar year 2018 of 3.3% (indicating a projected 3% growth rate without the tax cut). According to the National Income and Product Accounts (NIPA), actual growth rate was 2.9%, which is consistent with a small effect of the tax revision, perhaps even smaller than projected by most analysts. Quarterly growth rates are shown in Figure 1. The revenue loss from the tax cut without incorporated growth effects was estimated at about 1.2% of GBP in 2018... The high rate of growth in the second quarter of 2018 shown in Figure 1 may have been due to the demand-side stimulus of the tax cuts, which began to be reflected in withholding beginning in the first quarter, as well as the possibly delayed receipt of tax refunds. On the whole, the growth effects tend to show a relatively small (if any) first-year effect on the economy. Although examining the growth rates cannot indicate the effects of the tax cut on GDP, it does tend to rule out very large effects in the near term. The data appear to indicate that not enough growth occurred in the first year to cause the tax cut to pay for itself. Assuming a tax rate of 18% (based on CBO estimates), and estimating the tax cut to reduce revenue in calendar year 2018 by about 1.2% of GDP, a 6.7% GDP increase due to the tax cuts alone would be required.15 Rather, the combination of projections and observed effects for 2018 suggests a feedback effect of 0.3% of GDP or less—5% or less of the growth needed to fully offset the revenue loss from the Act...."

Jane G. Gravelle and Donald J. Marples, "The Economic Effects of the 2017 Tax Revision: Preliminary Observations," Congressional Budget Office, May 22, 2019, https://www.everycrsreport.com/reports/R45736.html

".... Chair Jerome Powell has said the Fed was never likely to get the size of its balance sheet back down to pre-crisis levels.But what officials haven’t really detailed is how large it will grow and how much U.S. debt the central bank will gobble up. The Fed will have around $2 trillion in Treasuries by year-end. By mid-2020 though, most Wall Street dealers expect the bank to start accumulating Treasuries once again, à la QE. And by the end of the coming decade, it will have more than doubled its holdings of the debt to roughly $4.4 trillion, leaving the overall size of its balance sheet close to $5 trillion, a Wells Fargo estimate showed. (Its MBS holdings will shrink from over $1.4 trillion to under $400 billion in that span.) Next year alone, TD’s Misra expects the Fed will purchase about $300 billion of Treasuries from the open market, or roughly 30% of the over $1 trillion that the U.S. is forecast to issue to cover its ballooning deficit. That’s in addition to the nearly $300 billion of maturing Treasuries the Fed will replace by buying directly from the government. What the Fed buys matters. Officials have said they may skew purchases toward shorter maturities, but no final plan has been set. The Fed holds no T-bills after swapping them out earlier this decade to drive down longer-term yields. Bill purchases could help lower short-term funding costs and widen the gap between 3-month and 10-year rates -- a key bond-market recession indicator -- after that part of the yield curve sporadically inverted since March, says Margaret Steinbach, a fixed-income investment specialist at Capital Group. “As part of normalization, we will have to decide what the maturity structure should be in the longer term,” Powell said at a May 1 press conference. So why exactly is the Fed getting back into the business of buying bonds? Part of it simply has to do with accounting. While attention has been focused on the asset side of the Fed’s balance sheet, it also has liabilities, which mainly come in the form of currency in circulation and bank reserves. As with any balance sheet, the two sides need to net out. Since those liabilities tend to naturally increase over time with the economy, so too must the Fed’s assets. It was this balancing act that prompted some on Wall Street to say the QE unwind was creating reserve scarcity. That by shrinking its asset base, the Fed squeezed reserves as currency grew on the liability side of its ledger. Lorie Logan, a key New York Fed official, said in April it’s monitoring indicators for changes in reserve conditions. Once the Fed decides the banking system has an appropriate level of reserves, it will need to start buying Treasuries again. Morgan Stanley’s Matthew Hornbach, who estimates the Fed will buy about $278 billion of Treasuries from the open market next year, says a third of that will be needed to prevent currency growth from squeezing bank reserves. Post-crisis regulations to curb financial risk-taking, as well as the fact the Fed pays interest on excess reserves as a policy tool, have also prompted banks to hold far more cash than before. That all suggests the Fed likely will keep growing its asset base -- indefinitely -- by continually buying Treasuries..."
Liz McCormick and Alex Harris, "QE May Be Over, But the Fed’s U.S. Debt Hoard Is About to Soar,"Bloomberg, May 21, 2019, https://www.bloomberg.com/news/articles/2019-05-21/qe-may-be-over-but-the-fed-s-u-s-debt-hoard-is-set-to-double