| Summary: | The present thesis investigates technological unemployment. An optimistic view states that technology, by reducing the production cost, results in higher demand. Thus, a re-employment of employees substituted by automation can occur in order to support the increased demand. The study focuses on the question whether elasticity of demand is appropriate to outweigh the negative impact of automation technology on employment. A model based on the system dynamics methodology has been developed addressing an industrial sector of products at a national level for a relatively short period of time. For the qualitative modeling, the problem is separated into subsystems and the main causality links between the variables of the system are drawn. For the quantitative modeling, a stock and flow diagram is constructed and the dynamic model is simulated using the software program iThink. Validity tests are performed to ensure the compatibility between the qualitative and quantitative models and the independence of the dynamic model from the initial conditions. Different elasticity scenarios are examined, and the results indicate that high elasticity can have a positive effect on employment when implementing automation technology.
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