Thorny Roses: A Peep into the Robotised Economic Future

24 Pages Posted: 13 Jun 2018

See all articles by Siddhartha Mitra

Siddhartha Mitra

Jadavpur University - Department of Economics

Date Written: May 28, 2018


This paper speculates about the impact of robotisation on the world economy in the next 20 years beyond which technological developments are difficult to anticipate. It is argued that though robotisation of sectors destroys jobs and thereby unleashes recessionary tendencies, Artificial Intelligence (AI) enables entrepreneurs, managers and workers to make more efficient use of their time (i.e. a given task can now be completed more quickly) and thereby leads to an increase in time available for consumption. We highlight that in any given sector (consisting of all firms producing a particular product or a class of similar products) robotisation spreads because of its greater cost efficiency as compared to conventional production. But this development by itself would lead to a decline in relative prices of products supplied by a sector and through income effects stimulate consumption of other products. Thus, in the wake of robotisation, the recessionary tendencies emerging from the destruction of jobs are pitted against the expansionary tendencies emerging from AI facilitated increase in consumption time and the mentioned fall in relative prices. Thus, all combinations of increased/decreased aggregate employment and increased/decreased national income are possible as economic outcomes. Generation of frictional unemployment with labour shifting from rapidly robotising sectors to others (reaping the advantages of enhanced consumption time) and possible burgeoning inequality would imply a need for national and global governments to provide succour to those rendered unemployed or impoverished through basic income schemes.

Keywords: automation, artificial intelligence, employment, jobs, labor, robots, wages

JEL Classification: J23, J24

Suggested Citation

Mitra, Siddhartha, Thorny Roses: A Peep into the Robotised Economic Future (May 28, 2018). Available at SSRN: or

Siddhartha Mitra (Contact Author)

Jadavpur University - Department of Economics ( email )

Kolkata, 700032


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