Pub Date : 2025-01-09DOI: 10.1016/j.strueco.2025.01.004
Armanda Cetrulo , Valeria Cirillo , Fabio Landini
How and to what extent does organized labour contribute to shaping firms’ competitive strategies by fostering innovation and investments in R&D? Drawing on insights from evolutionary theories and industrial relations studies, this paper empirically investigates how firm-level collective bargaining impacts firms’ investments in intangible assets, including R&D. The paper underlines how in the workplace context, where workers and managers pursue conflicting interests, the presence of a strong trade union able to bargain can empower workers’ voice and persuade management to invest in innovation related assets rather than compete through cost cutting strategies. We leverage a comprehensive and representative survey of Italian non-agricultural companies conducted by the National Institute for Public Policy Analysis to test these predictions. Baseline estimates indicate that firm-level bargaining, particularly in highly unionized firms, is linked to investments in R&D and other intangibles. Further analysis suggests that work organization clauses are key drivers of this positive relationship.
{"title":"Labour, unions and R&D in Italian firms","authors":"Armanda Cetrulo , Valeria Cirillo , Fabio Landini","doi":"10.1016/j.strueco.2025.01.004","DOIUrl":"10.1016/j.strueco.2025.01.004","url":null,"abstract":"<div><div>How and to what extent does organized labour contribute to shaping firms’ competitive strategies by fostering innovation and investments in R&D? Drawing on insights from evolutionary theories and industrial relations studies, this paper empirically investigates how firm-level collective bargaining impacts firms’ investments in intangible assets, including R&D. The paper underlines how in the workplace context, where workers and managers pursue conflicting interests, the presence of a strong trade union able to bargain can empower workers’ voice and persuade management to invest in innovation related assets rather than compete through cost cutting strategies. We leverage a comprehensive and representative survey of Italian non-agricultural companies conducted by the National Institute for Public Policy Analysis to test these predictions. Baseline estimates indicate that firm-level bargaining, particularly in highly unionized firms, is linked to investments in R&D and other intangibles. Further analysis suggests that work organization clauses are key drivers of this positive relationship.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 262-281"},"PeriodicalIF":5.0,"publicationDate":"2025-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143346504","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-08DOI: 10.1016/j.strueco.2025.01.006
Wenbo Shao, Yufan Chen, Huan Zhu
In 2015, China introduced the New Budget Law and Document No.43, which were designed to regulate land finance. Utilizing a difference-in-differences (DID) model, this study examines how these land finance regulations influence the investment decisions of real firms in China. The findings reveal that land finance regulations stimulate increased investments by real firms. Moreover, these regulations enhance firms' investments in production upgrading by easing financing constraints, and heighten risk awareness, ultimately driving investments in R&D. Cross-sectional analyses also reveal that these effects are particularly pronounced in regions with low levels of financial development and fiscal transparency. Additionally, they are more pronounced in industries that are capital-intensive and technology-intensive, as well as among non-state-owned, small firms, firms with high financing constraints and government subsidies. Therefore, China's targeted governance of land finance effectively fosters the advancement of real firms, aligning with the objective of achieving "high-quality development".
{"title":"Does the “Braking” of China's land finance facilitate economic “Shift Gears”? Evidence from investment decisions of real firms","authors":"Wenbo Shao, Yufan Chen, Huan Zhu","doi":"10.1016/j.strueco.2025.01.006","DOIUrl":"10.1016/j.strueco.2025.01.006","url":null,"abstract":"<div><div>In 2015, China introduced the New Budget Law and Document No.43, which were designed to regulate land finance. Utilizing a difference-in-differences (DID) model, this study examines how these land finance regulations influence the investment decisions of real firms in China. The findings reveal that land finance regulations stimulate increased investments by real firms. Moreover, these regulations enhance firms' investments in production upgrading by easing financing constraints, and heighten risk awareness, ultimately driving investments in R&D. Cross-sectional analyses also reveal that these effects are particularly pronounced in regions with low levels of financial development and fiscal transparency. Additionally, they are more pronounced in industries that are capital-intensive and technology-intensive, as well as among non-state-owned, small firms, firms with high financing constraints and government subsidies. Therefore, China's targeted governance of land finance effectively fosters the advancement of real firms, aligning with the objective of achieving \"high-quality development\".</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 223-237"},"PeriodicalIF":5.0,"publicationDate":"2025-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143360359","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-07DOI: 10.1016/j.strueco.2025.01.007
Jakob de Haan , Kersten Stamm , Shu Yu
Following earlier studies on accelerations of output and the capital stock growth, we propose an adjusted method to identify accelerations in investment. The method ensures that the identified episodes are characterized by sustained increases in per capita investment growth to a relatively high rate. We identify 192 investment accelerations in 93 economies (34 advanced economies and 59 emerging and developing economies) over 1950–2022. Output growth is about 2 percentage points higher during investment accelerations than in other years. Our evidence also suggests that economic policy reform and institutional quality are positively associated with the likelihood that such an acceleration occurs.
{"title":"Investment accelerations","authors":"Jakob de Haan , Kersten Stamm , Shu Yu","doi":"10.1016/j.strueco.2025.01.007","DOIUrl":"10.1016/j.strueco.2025.01.007","url":null,"abstract":"<div><div>Following earlier studies on accelerations of output and the capital stock growth, we propose an adjusted method to identify accelerations in investment. The method ensures that the identified episodes are characterized by sustained increases in per capita investment growth to a relatively high rate. We identify 192 investment accelerations in 93 economies (34 advanced economies and 59 emerging and developing economies) over 1950–2022. Output growth is about 2 percentage points higher during investment accelerations than in other years. Our evidence also suggests that economic policy reform and institutional quality are positively associated with the likelihood that such an acceleration occurs.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 196-210"},"PeriodicalIF":5.0,"publicationDate":"2025-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143346501","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-06DOI: 10.1016/j.strueco.2025.01.005
Giovanni Bella
This study investigates the conditions for the emergence of chaotic dynamics in the Goodwin economy studied in Sordi and Vercelli (2014), where the economic fluctuations occur in the presence of a class struggle in the labor force while assuming disequilibrium in the produced goods market. Applying the Shilnikov theorem, we derive a parametric configuration leading to a chaotic region that sets the economy on an undesired indeterminate equilibrium path. We also apply a standard stabilizing algorithm to determine a solution for ending the chaos. Implications of this study are noteworthy, as may produce a more powerful instrument to detect the emergence of unregular (chaotic) cycles and the possible path-dependence of equilibrium trajectories from the initial endowments of an economy, which remain instead hidden when the standard Hopf bifurcation theorem is uniquely applied.
{"title":"Emergence of chaotic dynamics in the Goodwin model with disequilibrium in the goods market","authors":"Giovanni Bella","doi":"10.1016/j.strueco.2025.01.005","DOIUrl":"10.1016/j.strueco.2025.01.005","url":null,"abstract":"<div><div>This study investigates the conditions for the emergence of chaotic dynamics in the Goodwin economy studied in Sordi and Vercelli (2014), where the economic fluctuations occur in the presence of a class struggle in the labor force while assuming disequilibrium in the produced goods market. Applying the Shilnikov theorem, we derive a parametric configuration leading to a chaotic region that sets the economy on an undesired indeterminate equilibrium path. We also apply a standard stabilizing algorithm to determine a solution for ending the chaos. Implications of this study are noteworthy, as may produce a more powerful instrument to detect the emergence of unregular (chaotic) cycles and the possible path-dependence of equilibrium trajectories from the initial endowments of an economy, which remain instead hidden when the standard Hopf bifurcation theorem is uniquely applied.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 170-180"},"PeriodicalIF":5.0,"publicationDate":"2025-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143346502","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-04DOI: 10.1016/j.strueco.2024.12.019
Itchoko Motande Mwa Ndjokou Mondjeli , Martin Ambassa
Corruption significantly distorts the allocation of public expenditures, yet systematic evidence on its effects on current and capital expenditures is limited. This study analyzes panel data from 45 Sub-Saharan African (SSA) countries from 1996 to 2022. Using fixed effects and instrumental variables models, we find that corruption reduces capital expenditures while increasing current expenditures. Additionally, mediation analysis reveals that income inequality, conflict, and the rule of law are key channels through which corruption impacts public expenditure structures in SSA. We recommend enhancing accountability and transparency in public expenditures and prioritizing good governance.
{"title":"Does corruption really matter for the structure of public expenditures?","authors":"Itchoko Motande Mwa Ndjokou Mondjeli , Martin Ambassa","doi":"10.1016/j.strueco.2024.12.019","DOIUrl":"10.1016/j.strueco.2024.12.019","url":null,"abstract":"<div><div>Corruption significantly distorts the allocation of public expenditures, yet systematic evidence on its effects on current and capital expenditures is limited. This study analyzes panel data from 45 Sub-Saharan African (SSA) countries from 1996 to 2022. Using fixed effects and instrumental variables models, we find that corruption reduces capital expenditures while increasing current expenditures. Additionally, mediation analysis reveals that income inequality, conflict, and the rule of law are key channels through which corruption impacts public expenditure structures in SSA. We recommend enhancing accountability and transparency in public expenditures and prioritizing good governance.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 181-195"},"PeriodicalIF":5.0,"publicationDate":"2025-01-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143360360","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-03DOI: 10.1016/j.strueco.2025.01.001
Yingnan Zhang , Guanqi Wu , Bin Zhang
This study explores the transformation pathways of China's power industry from 2020 to 2060 using the "Dynamic System and Low Emissions Analysis Platform" (SD-LEAP) model. The analysis assumes market regulation mechanisms include the carbon emission trading (CET) and the tradable green certificate (TGC) market, while assistive technologies encompass Carbon Capture, Utilization, and Storage (CCUS) and energy storage. The study evaluates costs and CO2 emissions under these influences. Our findings indicate higher CET prices reduce fossil and biomass energy capacity, while higher TGC prices boost clean energy capacity. CCUS implementation and increased CET prices lower fossil power generation costs. Conversely, higher TGC prices and advances in energy storage raise renewable energy capacity and costs by 2060. Combined market regulations and assistive technologies are projected to reduce CO2 emissions by 509.3 to 1466.3 million tons by 2060, with policy recommendations for supporting China's power system development.
{"title":"Costs and CO2 emissions of technological transformation in China's power industry: The impact of market regulation and assistive technologies","authors":"Yingnan Zhang , Guanqi Wu , Bin Zhang","doi":"10.1016/j.strueco.2025.01.001","DOIUrl":"10.1016/j.strueco.2025.01.001","url":null,"abstract":"<div><div>This study explores the transformation pathways of China's power industry from 2020 to 2060 using the \"Dynamic System and Low Emissions Analysis Platform\" (SD-LEAP) model. The analysis assumes market regulation mechanisms include the carbon emission trading (CET) and the tradable green certificate (TGC) market, while assistive technologies encompass Carbon Capture, Utilization, and Storage (CCUS) and energy storage. The study evaluates costs and CO<sub>2</sub> emissions under these influences. Our findings indicate higher CET prices reduce fossil and biomass energy capacity, while higher TGC prices boost clean energy capacity. CCUS implementation and increased CET prices lower fossil power generation costs. Conversely, higher TGC prices and advances in energy storage raise renewable energy capacity and costs by 2060. Combined market regulations and assistive technologies are projected to reduce CO<sub>2</sub> emissions by 509.3 to 1466.3 million tons by 2060, with policy recommendations for supporting China's power system development.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 211-222"},"PeriodicalIF":5.0,"publicationDate":"2025-01-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143345740","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-31DOI: 10.1016/j.strueco.2024.12.022
Peijun Xie , Jian Wang , Shiyi Tang , Irum Shahzadi , Yuriy Bilan
Green innovation in family businesses is a significant yet underexplored area of research, particularly with regard to the influence of dynamic succession characteristics on intergenerational inheritance and its impact on innovation. This study, integrating the social-emotional wealth theory (SEW) and the agency theory, examines 505 Chinese listed family firms spanning from 2011 to 2020. Employing the Difference-in-Differences (DID) method, we investigate how intergenerational inheritance affects green innovation investment over time. Our findings reveal that initially, intergenerational transmission tends to inhibit green innovation investment in family businesses; however, this effect diminishes as the intergenerational process unfolds, indicative of the maturation of the second generation. Notably, we observe that a higher education level among second-generation heirs weakens the inhibitory effect of intergenerational inheritance on green innovation investment. This study addresses a gap in green innovation research by considering intergenerational transmission dynamics in family businesses, thus enhancing our understanding of innovation behaviors within this context. By synthesizing SEW and agency theory, this research offers novel insights into the varying impacts of intergenerational inheritance on firm innovation, shedding light on approaches to reconcile the willingness-ability paradox in family business innovation and promoting effective governance of succession processes.
{"title":"How does intergenerational transmission affect green innovation? Evidence from Chinese family businesses","authors":"Peijun Xie , Jian Wang , Shiyi Tang , Irum Shahzadi , Yuriy Bilan","doi":"10.1016/j.strueco.2024.12.022","DOIUrl":"10.1016/j.strueco.2024.12.022","url":null,"abstract":"<div><div>Green innovation in family businesses is a significant yet underexplored area of research, particularly with regard to the influence of dynamic succession characteristics on intergenerational inheritance and its impact on innovation. This study, integrating the social-emotional wealth theory (SEW) and the agency theory, examines 505 Chinese listed family firms spanning from 2011 to 2020. Employing the Difference-in-Differences (DID) method, we investigate how intergenerational inheritance affects green innovation investment over time. Our findings reveal that initially, intergenerational transmission tends to inhibit green innovation investment in family businesses; however, this effect diminishes as the intergenerational process unfolds, indicative of the maturation of the second generation. Notably, we observe that a higher education level among second-generation heirs weakens the inhibitory effect of intergenerational inheritance on green innovation investment. This study addresses a gap in green innovation research by considering intergenerational transmission dynamics in family businesses, thus enhancing our understanding of innovation behaviors within this context. By synthesizing SEW and agency theory, this research offers novel insights into the varying impacts of intergenerational inheritance on firm innovation, shedding light on approaches to reconcile the willingness-ability paradox in family business innovation and promoting effective governance of succession processes.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 158-169"},"PeriodicalIF":5.0,"publicationDate":"2024-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143346447","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-31DOI: 10.1016/j.strueco.2024.12.021
Brandon Parsons , Ayoub Rabhi
This study examines the effect of exchange rate volatility (ERV), depreciating ER movements, and appreciating ER movements on income inequality in 31 high-income countries from 1990 to 2021. Using panel data econometric models and data from multiple sources, the findings indicate that ERV increases Gini coefficients, disproportionately benefits the top 10/20 %, and negatively impacts the bottom 40/50 %. The study also finds ER depreciation exacerbates income inequality, while appreciations have uncertain effects. The effects of ERV are stronger on the market Gini coefficient than the net Gini coefficient, highlighting the important role of redistribution policies. The study underscores the critical role of ER and their volatility in influencing income distribution. It also highlights the importance of ER management policies and income redistribution mechanisms.
{"title":"Shifting sands: How exchange rate volatility shapes income distribution in high-income countries","authors":"Brandon Parsons , Ayoub Rabhi","doi":"10.1016/j.strueco.2024.12.021","DOIUrl":"10.1016/j.strueco.2024.12.021","url":null,"abstract":"<div><div>This study examines the effect of exchange rate volatility (ERV), depreciating ER movements, and appreciating ER movements on income inequality in 31 high-income countries from 1990 to 2021. Using panel data econometric models and data from multiple sources, the findings indicate that ERV increases Gini coefficients, disproportionately benefits the top 10/20 %, and negatively impacts the bottom 40/50 %. The study also finds ER depreciation exacerbates income inequality, while appreciations have uncertain effects. The effects of ERV are stronger on the market Gini coefficient than the net Gini coefficient, highlighting the important role of redistribution policies. The study underscores the critical role of ER and their volatility in influencing income distribution. It also highlights the importance of ER management policies and income redistribution mechanisms.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 89-100"},"PeriodicalIF":5.0,"publicationDate":"2024-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143345797","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-27DOI: 10.1016/j.strueco.2024.12.020
Mariarosaria Agostino, Sandro Rondinella
The nexus between weather extreme events and firms’ propensity to adopt green innovation is theoretically ambiguous and still lacking empirical evidence. Combining a rich database on natural events, defined at provincial level, with balance sheet and patents information on a large sample of Italian manufacturing firms, this study adopts econometric analysis to examine whether green innovation is affected by extreme events. Our findings indicate that both disruptive and less disruptive climate disasters can hinder firms’ green innovation in both the short and medium terms. Moreover, industry heterogeneity emerges, with firms belonging to low-tech sectors more affected than those operating in high-tech sectors. Therefore, our evidence highlights the critical need for sector-specific adaptation plans that include measures to protect and enhance the innovative capacity of firms, particularly in less technologically advanced sectors. Such plans should be aligned with tailored and long-run industrial policies to address the challenges posed by climate stressors.
{"title":"Do climate extreme events stimulate or hinder green innovation? Evidence from the Italian manufacturing sector","authors":"Mariarosaria Agostino, Sandro Rondinella","doi":"10.1016/j.strueco.2024.12.020","DOIUrl":"10.1016/j.strueco.2024.12.020","url":null,"abstract":"<div><div>The nexus between weather extreme events and firms’ propensity to adopt green innovation is theoretically ambiguous and still lacking empirical evidence. Combining a rich database on natural events, defined at provincial level, with balance sheet and patents information on a large sample of Italian manufacturing firms, this study adopts econometric analysis to examine whether green innovation is affected by extreme events. Our findings indicate that both disruptive and less disruptive climate disasters can hinder firms’ green innovation in both the short and medium terms. Moreover, industry heterogeneity emerges, with firms belonging to low-tech sectors more affected than those operating in high-tech sectors. Therefore, our evidence highlights the critical need for sector-specific adaptation plans that include measures to protect and enhance the innovative capacity of firms, particularly in less technologically advanced sectors. Such plans should be aligned with tailored and long-run industrial policies to address the challenges posed by climate stressors.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 101-111"},"PeriodicalIF":5.0,"publicationDate":"2024-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143346450","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-12-25DOI: 10.1016/j.strueco.2024.12.016
Clovis Freire
Recent developments in artificial intelligence (AI) have revived concerns about technological unemployment and the increase in inequality due to technological change. Many studies of the impact of automation have considered a static picture of economies that put less emphasis on their potential for job creation through product innovation. They also tend to focus on developed countries and do not consider the potential impact on developing countries through trade and changes in specialisation patterns. This paper studies the impact of AI on the GDP and employment in low, middle and high-income countries, as well as on the income inequality across countries, based on computer simulations of a multi-country, multi-sector macroeconomic model with endogenous technological change proposed by Freire (2017, 2019). It considers the effect of AI in reducing labour requirements and the potential effects of increasing the pace of product and process innovation. The analysis suggests that the introduction of AI, even when assuming large effects of labour substitution, results in only small changes at the aggregated level of GDP and employment. However, there is an increase in income inequality across countries, and there are considerable shifts in jobs between production sectors and R&D. This suggests that AI may not cause mass technological unemployment but would still result in large distributional changes in low, middle and high-income countries.
{"title":"Is this time different? Impact of AI in output, employment and inequality across low, middle and high-income countries","authors":"Clovis Freire","doi":"10.1016/j.strueco.2024.12.016","DOIUrl":"10.1016/j.strueco.2024.12.016","url":null,"abstract":"<div><div>Recent developments in artificial intelligence (AI) have revived concerns about technological unemployment and the increase in inequality due to technological change. Many studies of the impact of automation have considered a static picture of economies that put less emphasis on their potential for job creation through product innovation. They also tend to focus on developed countries and do not consider the potential impact on developing countries through trade and changes in specialisation patterns. This paper studies the impact of AI on the GDP and employment in low, middle and high-income countries, as well as on the income inequality across countries, based on computer simulations of a multi-country, multi-sector macroeconomic model with endogenous technological change proposed by Freire (2017, 2019). It considers the effect of AI in reducing labour requirements and the potential effects of increasing the pace of product and process innovation. The analysis suggests that the introduction of AI, even when assuming large effects of labour substitution, results in only small changes at the aggregated level of GDP and employment. However, there is an increase in income inequality across countries, and there are considerable shifts in jobs between production sectors and R&D. This suggests that AI may not cause mass technological unemployment but would still result in large distributional changes in low, middle and high-income countries.</div></div>","PeriodicalId":47829,"journal":{"name":"Structural Change and Economic Dynamics","volume":"73 ","pages":"Pages 136-157"},"PeriodicalIF":5.0,"publicationDate":"2024-12-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143346449","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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