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Economic Growth under Transformative AI

Author

Listed:
  • Trammell, Philip
  • Korinek, Anton
Abstract
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.

Suggested Citation

  • Trammell, Philip & Korinek, Anton, 2024. "Economic Growth under Transformative AI," CEPR Discussion Papers 18780, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:18780
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    File URL: https://cepr.org/publications/DP18780
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    Cited by:

    1. Anton Korinek & Donghyun Suh, 2024. "Scenarios for the Transition to AGI," NBER Working Papers 32255, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Artificial intelligence; Growth; Labor share; Self-replicating capital; Self-improving capital;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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