Firms and policymakers routinely promote time-saving technologies on the assumption that they reduce the time households devote to home production. Yet a century of labor-saving household appliances reduced housework time only modestly, while newer innovations such as on-demand food delivery show more consistent time savings. The divergence reflects a distinction that existing frameworks do not typically make explicit. The relevant question is not whether a technology saves time, but which component of the household production problem it affects. Efficiency-improving technologies raise demand for home-produced goods, but their effect on total housework time is ambiguous because the induced increase in home-good consumption may be smaller than, equal to, or larger than the direct reduction in time required per unit. Technologies that lower the full price of market substitutes, which combine the money outlay with the time a household must spend obtaining the good, tend to produce more systematic substitution away from home production when the compensated composition effect outweighs the accompanying aggregate-demand response. This paper develops a simple household production framework that formalizes this distinction and illustrates the mechanisms using three contemporary technologies, namely robotic cleaning devices, food delivery platforms, and meal kit services. The American Time Use Survey series covering 2003–2019 and 2021–2024 illustrates the divergent time-use patterns that the framework is designed to organize. The framework implies that a technology’s time effect depends on the parameter it changes. Reductions in the full price of market alternatives reduce home-production time when the elasticity of substitution exceeds the aggregate demand elasticity, whereas the effect of a pure home-production efficiency improvement is generally ambiguous.
This paper examines the macroeconomic and cyclical implications of the sharing economy. A dynamic stochastic general equilibrium framework is developed that integrates a sharing sector with traditional market and home production. In this model, the sharing economy bridges market and home activities by using household capital to produce tradable services. The analysis shows that a positive neutral technological shock to market production expands business investment but crowds out durable asset accumulation, causing both home and sharing output to decline. Conversely, a positive productivity shock within the sharing economy stimulates investment in durables but reduces business capital investment, market output, and market hours. Furthermore, investment-specific technological shocks to durables expand household capital at the expense of business capital. However, they do not reduce effective consumption because household capital simultaneously feeds into home production and sharing activities, sustaining the consumption aggregate. Overall, the results indicate that the sharing economy is countercyclical: households mitigate market downturns by monetizing durable assets, smoothing the business cycle. These findings emphasize the need to account for the sharing economy when designing macroeconomic business cycle stabilization policies, given its role in amplifying and transmitting shocks through household capital.
This short paper examines evidence that effective carbon taxes reduce greenhouse gas emissions but also lower gross domestic product (GDP) and increase unemployment, highlighting macroeconomic tradeoffs and the importance of revenue recycling and complementary climate policies.
