Macroeconomic Effects of Financial Integration, Demographic Aging and Automation Technology

Abstract

This thesis combines work on three important long-run trends and their macroeconomic implications: Financial integration, demographic aging and the use of automation technology in the production process. The first chapter looks at the effects of financial integration - a country's accumulation of external assets and liabilities - on the allocation of capital across economic sectors. It shows how international capital flows are driven by differences in the development of countries' financial systems. An alternative explanation for international capital flows is provided in the second chapter. Regional differences in the age structure of the population are shown to generate cross-country differences in the demand for safe and risky assets and - in a financially integrated world - a risk asymmetry in external asset positions. Chapter three focuses on a recent technological trend: advances in automation technology. It assesses the labor market effects of automation by means of a novel patent-based measure and finds overall employment gains. All chapters have in common that the phenomena they study are not just important today, but will likely become even more so over the next decades. Therefore, this thesis offers not just relevant policy advice, but also a research agenda for analyzing the future of capital and labor markets.