Impact Of Technology On The Economy Essay

1387 Words Jan 2nd, 2015 6 Pages
Many governments & economists encourage increased use of automation in the economy. Historically, new technological advances have always caused increased unemployment in the short term but also has always increased employment in the long term. An example would be that if combustion engines pushed out buggy whip manufacturers, that ended up being ok, because those buggy whippers left unemployed would be able to get reemployed as engine mechanics, etc. The aggregate effect of new technologies has always been higher aggregate employment.

I will argue that not only is that changing, but this new era of structural, technological unemployment is something we should seek out for the betterment of society and our economy. Today, economist and governments view the health of their economy is heavily based on the GDP. As you remember, the GDP is the “aggregate measure of production”. There are three basic ways to determine GDP; Production approach, Income approach and Expenditure approach. All three should produce the same number. I argue that because of improvements in technology and the resulting structural unemployment, these three approaches will be beginning to produce different numbers and result in a need to reevaluate how we put a value on our economy. Historically, since technological improvements increase productivity (a key factor in both classical and Keynesian economic models). And if a new technology is able to decrease the costs of production; increased productivity…

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