Artificial Intelligence, Jobs, Inequality and Productivity: Does Aggregate Demand Matter?

Arbeitspapier

Rapid technological progress in artificial intelligence (AI) has been predicted to lead to mass unemployment, rising inequality, and higher productivity growth through automation. In this paper we critically re-assess these predictions by (i) surveying the recent literature and (ii) incorporating AI-facilitated automation into a product variety-model, frequently used in endogenous growth theory, but modified to allow for demand-side constraints. This is a novel approach, given that endogenous growth models, and including most recent work on AI in economic growth, are largely supply-driven. Our contribution is motivated by two reasons. One is that there are still only very few theoretical models of economic growth that incorporate AI, and moreover an absence of growth models with AI that takes into consideration growth constraints due to insufficient aggregate demand. A second is that the predictions of AI causing massive job losses and faster growth in productivity and GDP are at odds with reality so far: if anything, unemployment in many advanced economies is historically low. However, wage growth and productivity is stagnating and inequality is rising. Our paper provides a theoretical explanation of this in the context of rapid progress in AI.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 12005

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Technological Change: Choices and Consequences; Diffusion Processes ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Macroeconomics: Consumption; Saving; Wealth ; Aggregate Factor Income Distribution
• Thema: technology ; artificial intelligence ; productivity ; labour demand ; innovation ; growth theory

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Gries, Thomas ; Naudé, Wim
• Ereignis: Veröffentlichung
• (wer): Institute of Labor Economics (IZA)
• (wo): Bonn
• (wann): 2018

Weitere Informationen

• Handle: http://hdl.handle.net/10419/193299
• Letzte Aktualisierung: 10.03.2025, 11:46 MEZ