Economic Growth Under Transformative AI: A Guide to the Vast Range of Possibilities for Output Growth, Wages, and the Laborshare
At least since Herbert Simon’s (1960) prediction that artificial intelligence would soon replace all human labor, many economists have understood that there is a possibility that sooner or later artificial intelligence (AI) will dramatically transform the global economy. AI could have a transformative impact on a wide variety of domains; indeed, it could transform market structure, the value of education, the geopolitical balance of power, and practically anything else. The authors focus on three of the clearest and best-studied classes of potential transformations in economics: the potential impacts on output growth, on wage growth, and on the labor share, i.e. the share of output paid as wages. On all counts they focus on long-run impacts rather than transition dynamics. Instead of attempting to predict the future, they focus on surveying the vast range of possibilities identified in the economics literature to survey the predictions of the various models and pinpoint the reasons for why they differ so starkly.