The macroeconomics of automation

This paper develops a theory in which the degree of automation in the aggregate economy emerges endogenously as an equilibrium outcome and can be inferred from standard macroeconomic data. We define the degree of automation as the share of tasks performed by capital rather than labor and embed it in a task-based production framework with endogenous technology adoption. Aggregating task-level decisions generates a CES production function in which the economy-wide degree of automation emerges endogenously. This structure provides a transparent mapping from standard macroeconomic observables, such as the capital-labor ratio, output per worker, and the elasticity of substitution, into the degree of automation, allowing automation to be measured without relying on technology-specific indicators. Applying the framework to Japanese manufacturing industries, we show that automation increased through capital deepening even during periods of slow productivity growth.