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.
Continue reading “Fish and (micro)chips: Why I’m relatively relaxed about robots”
Advances in machine learning and mobile robotics mean that robots could do your job better than you. That’s led to some radical predictions of mass unemployment, much more leisure or a work free future. But labour saving innovations and the debates around them aren’t really anything new. Queen Elizabeth I denied a patent for a knitting machine over fears it would create unemployment, Ricardo thought technology would lower wages and Keynes famously predicted a 15 hour working week by 2030. Understanding why these beliefs proved to be wrong gives us important insights into why similar claims about robotisation might be incorrect. But automation could nevertheless have sizeable distributional implications and ramifications well beyond the industries in which it’s deployed.
Continue reading “Robot Macroeconomics: What can theory and several centuries of economic history teach us?”
Central banks (CBs) have long issued paper currency. The development of Bitcoin and other private digital currencies has provided them with the technological means to issue their own digital currency. But should they?
Addressing this question is part of the Bank’s Research Agenda. In this post I sketch out how a CB digital currency – call it CBcoin – might affect the monetary and banking systems – setting aside other important and complex systemic implications that range from prudential regulation and financial stability to technology, operational and financial conduct.
I argue that taken to its most extreme conclusion, CBcoin issuance could have far-reaching consequences for commercial and central banking – divorcing payments from private bank deposits and even putting an end to banks’ ability to create money. By redefining the architecture of payment systems, CBcoin could thus challenge fractional reserve banking and reshape the conduct of monetary policy.
Continue reading “Central bank digital currency: the end of monetary policy as we know it?”
Peer-to-peer lending platforms (P2P platforms) emerged after the financial crisis by catering for pent-up demand for unsecured borrowing from individuals and small businesses. Ten years after the conception of P2P platforms, the question is whether they may soon start to penetrate more mainstream lending markets and thereby challenge high street lenders. For example, according to the latest survey compiled by Nesta, P2P lending for the year 2015 was the equivalent of 3.9% of new loans lent to SMEs, although the outstanding stock of P2P lending is much lower. This post considers how seriously in practice to take this threat to the traditional banking model.
Continue reading “The growth of peer-to-peer lending platforms and prospects for banks’ disintermediation – hype or real threat?”