Measuring AI-Driven Risk with Stock Prices
Susana Campos-Martins (Global Priorities Institute, University of Oxford)
GPI Working Paper No. 31-2024
We propose an empirical approach to identify and measure AI-driven shocks based on the co-movements of relevant financial asset prices. For that purpose, we first calculate the common volatility of the share prices of major US AI-relevant companies. Then we isolate the events that shake this industry only from those that shake all sectors of economic activity at the same time. For the sample analysed, AI shocks are identified when there are announcements about (mergers and) acquisitions in the AI industry, launching of new products, releases of new versions, and AI-related regulations and policies.
Other working papers
Economic growth under transformative AI – Philip Trammell (Global Priorities Institute, Oxford University) and Anton Korinek (University of Virginia)
Industrialized countries have long seen relatively stable growth in output per capita and a stable labor share. AI may be transformative, in the sense that it may break one or both of these stylized facts. This review outlines the ways this may happen by placing several strands of the literature on AI and growth within a common framework. We first evaluate models in which AI increases output production, for example via increases in capital’s substitutability for labor…
Egyptology and Fanaticism – Hayden Wilkinson (Global Priorities Institute, University of Oxford)
Various decision theories share a troubling implication. They imply that, for any finite amount of value, it would be better to wager it all for a vanishingly small probability of some greater value. Counterintuitive as it might be, this fanaticism has seemingly compelling independent arguments in its favour. In this paper, I consider perhaps the most prima facie compelling such argument: an Egyptology argument (an analogue of the Egyptology argument from population ethics). …
The Conservation Multiplier – Bård Harstad (University of Oslo)
Every government that controls an exhaustible resource must decide whether to exploit it or to conserve and thereby let the subsequent government decide whether to exploit or conserve. This paper develops a positive theory of this situation and shows when a small change in parameter values has a multiplier effect on exploitation. The multiplier strengthens the influence of a lobby paying for exploitation, and of a donor compensating for conservation. …