Economics and Finance Seminars: Henrique Basso (Bank of Spain)
When:
—
Venue:
Birkbeck Central
We will be hosting Henrique Basso of the Bank of Spain, who will be presenting the following paper:
"Robot Adoption and Inflation Dynamics"
Abstract: We leverage variation in robot adoption across U.S. metropolitan areas and doc ument that automation reduces the sensitivity of inflation to unemployment. To rationalize this finding, we build a New Keynesian model with search frictions in which low-frequency movements in automation flatten the wage and price Phillips curves. The key channel is the option value of automation: the threat of automating labor tasks alters workers’ bargaining power, muting the wage sensitivity to unemployment. We validate the relevance of this channel in the data. Finally, we show under which conditions the Phillips curve can steepen up notwithstanding a higher degree of automation.
Contact name:
Camille Boudot-Reddy