Lawn Economics

Paul Donovan uses the example of robotic lawnmowers to argue that capital-for-labor substitution in domestic tasks maintains living standards while diminishing the relevance of GDP.

Key Takeaways

• 1.Domestic capital substitution for labor (e.g., robot mowers replacing gardeners) maintains living standards while reducing or failing to contribute to GDP.
• 2.As populations age, the substitution of domestic capital for labor is expected to become more common, making GDP a less relevant metric for measuring living standards.
• 3.Advancements in AI and robotics improve domestic productivity, but these gains go unrecorded in economic data and create no disinflationary impulse.

Table of Contents

• Lawn economics
• Global asset class preferences definitions
• Appendix
• Risk information
• Generic investment research – Risk information
• Additional Disclaimer relevant to Credit Suisse Wealth Management

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