A0788
Title: Automation and monetary policy: An empirical investigation
Authors: Takuji Fueki - Hitotsubashi University (Japan) [presenting]
Jouchi Nakajima - Hitotsubashi University (Japan)
Abstract: The evolving impact of monetary policy is examined amid advancements in autonomous machines or robots. To this end, a nonlinear VAR model is developed, distinguishing between a low automation regime and a highly developed automation regime. This model allows capturing potential nonlinearities in macroeconomic dynamics due to advances in automation in the U.S. and Japan. The findings reveal significant asymmetries in the responses of key macroeconomic variables to identified monetary policy shocks across these two regimes. Notably, the effectiveness of monetary policy diminishes as automation advances, aligning with theoretical predictions. This finding holds crucial implications for post-automation monetary policies.
