Joseba will be visiting the department for this Seminar, Federico Rossi is hosting this visit.

Title Automation Potential and Diffusion

Abstract: We introduce a novel methodology to measure the invention and diffusion of labor-replacing technology in the US economy. First, we measure the relevance of US patents introduced from 1920-2018 to work tasks performed by human workers using a natural language processing algorithm. After controlling for the confounding effects of the evolution of language, we obtain a measure that we call the \textit{automation potential} of newly introduced technology: the potential for that technology to eventually replace human workers in the performance of tasks. In a local projections framework, we estimate the impulse response of task hours worked to an automation potential shock and find negative effects, especially at longer horizons, suggesting i) that our measure captures the development of labor-replacing technology, and ii) that such technology diffuses gradually into the economy.