Anchi (Bryant) Xia

Abstract: We develop a dynamic model of data-driven automation in which data (i)  is  heterogeneous: task data is specialized; (ii) accumulates endogenously as a byproduct of economic activity; and (iii)  exhibits spillovers: data generated by one task can augment productivity of another. Along the transition path of automation, data plays a dual role in simultaneously augmenting the productivity of already-automated tasks and expanding the automation frontier. We derive tight conditions for the economy to be fully versus partially automated in the long-run, and show that the economy is generically inefficient. In the efficient allocation, the social planner amplifies the equilibrium direction of capital allocation and data accumulation along the transition path. 

Abstract: How should income taxes respond to changes in technology or labor markets? Starting from a benchmark where changes in the income distribution do not affect the fiscal cost of redistribution, we emphasize three key factors: First, increased income inequality decreases the cost of redistribution. Second, uniform income growth decreases the cost of redistribution when higher income households have higher labor supply elasticities. Third, uniform income growth increases (decreases) the cost of redistribution at high (low) incomes when elasticities vary within income levels. A preliminary calibration to the U.S. between 1982 and 2008 suggests the third effect has dominated, making redistribution more expensive.