Funded by The Australian Research Council (Discovery Project)

Funding Amount: $500,853

Project start date: 2020

Researchers

  • Prof Markus Brueckner (CI), ANU
  • Prof Rodney Tyers (CI), University of Western Australia
  • A/Prof Yixiao Zhou (CI), University of Western Australia

Project Description

The transition to wider use of robotics and artificial intelligence may eventually make our citizens better off, yet effects on domestic income and wealth inequality remain uncertain, depending strongly on general governance and macroeconomic policy regimes. This project would help clarify income inequality effects, both abroad and in Australia, through (i) new numerical theory from calibrated economic models at the global and national levels; (ii) econometric testing of results from global and national data; (iii) the use of emerging insights to analyse economic policy responses and their global interaction as well as the implications for Australian economic policy

National Interest Statement

In an era of slowing economic growth the transition to wider use of robotics and artificial intelligence greatly increases uncertainty about how economic activity is distributed around the world and its implications for wages, employment and domestic income inequality. Australia’s economy is increasingly dependent on China, yet China’s future performance depends on outcomes from a technology race with North America, Europe and Japan. Australia’s performance therefore also depends on strategic interactions between policy regimes in all four regions. This project will help clarify these effects through the application of new economic models at the global and national levels, the testing of their implications against global and national data and the use of emerging insights to analyse economic policy responses in each region. This new information will better equip the Australian government to address the implications of the technology transition by offering a vision of the future consequences of potential restorative changes to its fiscal, trade, financial and foreign policies.