We may be on the cusp of a 'second industrial revolution' based on advances in artificial
intelligence and robotics. We analyze the implications for inequality and output, using
a model with two assumptions: 'robot' capital is distinct from traditional capital in its
degree of substitutability with human labor; and only capitalists and skilled workers save.
We analyze a range of variants that reflect widely different views of how automation may
transform the labor market. Our main results are surprisingly robust: automation is good
for growth and bad for equality; in the benchmark model real wages fall in the short run
and eventually rise, but 'eventually' can easily take generations.