Does Automation Lead to Permanent Job Losses?

This post on the Federal Reserve Bank of St. Louis’s Page One blog discusses how the belief that automation can lead to permanent job losses is an example of the “lump of labor” fallacy. Click HERE to read the article.

The post refers to the circular-flow diagram, which we discuss in Chapter 2 and in Chapter 18 in the textbook. We discuss the effects of automation and robots on the labor market in Chapter 16.