Scenarios of technological progress in Italy: what can we expect?

ABSTRACT The simple but deep sense of technological progress (TP) lies in the possibility of improving human life. The immediate question thereafter is clearly about the distribution of the gains from TP. With the diffusion of automation and artificial intelligence, fears about the implications of TP on employment and wages have gained renewed importance. While scholars are divided on the effects of this new wave of TP, they agree that every economy will be affected differently, and hence, it will require tailored policy measures. In this paper, we frame how TP could affect the Italian economy, as it is now. We simulate four different scenarios through a dynamic computable general equilibrium model with three types of labour and six types of households. We calibrate the model on the social accounting matrix, and we find that TP returns higher growth patterns albeit with disruptive effects on labour.