My earlier post arguing that robotisation wouldn’t destroy jobs, slash wages or drastically shorten the working week prompted many thoughtful responses. Richard Serlin and others countered, arguing that if automation affects all sectors, then displaced workers may have nowhere to go. Others asked if the sheer scale, speed and scope of robotisation might make it much more disruptive. Or if wages fall, who will be able to buy the extra output? And Noah Smith raised the prospect that robotisation might eventually differ from earlier waves of innovation by replacing rather than complementing human labour. This post attempts to respond to those points, expand on the original post and explain why I’m still relatively relaxed about robots.
Inflation breakevens and inflation swap rates have fallen a lot in recent years. Big falls have often occurred amid deteriorating risk sentiment. This isn’t a new phenomenon. Looking across markets and time periods, I show that measures of financial market inflation compensation tend to fall when risk sentiment worsens. What’s more, this effect is asymmetric – inflation compensation doesn’t rise by as much when risk sentiment improves.
Sometimes the obvious questions are the hardest to answer. In this post I ask how much of what the Bank and the financial industry in general write can actually be read by a broad audience. Based on my findings, I suggest that both must try harder if claims of accessibility are to be meaningful.