Economic growth under transformative AI
Philip Trammell (Global Priorities Institute, Oxford University) and Anton Korinek (University of Virginia, NBER and CEPR)
GPI Working Paper No. 8-2020, published in the National Bureau of Economic Research Working Paper series and forthcoming in the Annual Review of Economics
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 or task automation, capturing the notion that AI will let capital “self-replicate”. This typically speeds up growth and lowers the labor share. We then consider models in which AI increases knowledge production, capturing the notion that AI will let capital “self-improve”, speeding growth further. Taken as a whole, the literature suggests that sufficiently advanced AI is likely to deliver both effects.
Other working papers
Longtermism in an Infinite World – Christian J. Tarsney (Population Wellbeing Initiative, University of Texas at Austin) and Hayden Wilkinson (Global Priorities Institute, University of Oxford)
The case for longtermism depends on the vast potential scale of the future. But that same vastness also threatens to undermine the case for longtermism: If the future contains infinite value, then many theories of value that support longtermism (e.g., risk-neutral total utilitarianism) seem to imply that no available action is better than any other. And some strategies for avoiding this conclusion (e.g., exponential time discounting) yield views that…
The end of economic growth? Unintended consequences of a declining population – Charles I. Jones (Stanford University)
In many models, economic growth is driven by people discovering new ideas. These models typically assume either a constant or growing population. However, in high income countries today, fertility is already below its replacement rate: women are having fewer than two children on average. It is a distinct possibility — highlighted in the recent book, Empty Planet — that global population will decline rather than stabilize in the long run. …
Prediction: The long and the short of it – Antony Millner (University of California, Santa Barbara) and Daniel Heyen (ETH Zurich)
Commentators often lament forecasters’ inability to provide precise predictions of the long-run behaviour of complex economic and physical systems. Yet their concerns often conflate the presence of substantial long-run uncertainty with the need for long-run predictability; short-run predictions can partially substitute for long-run predictions if decision-makers can adjust their activities over time. …