MIT News December 6, 2024
Researchers at MIT evaluated claims about the large macroeconomic implications of new advances in AI. So long as AI’s microeconomic effects are driven by cost savings/productivity improvements at the task level, its macroeconomic consequences will be given by Gross Domestic Product (GDP) and aggregate productivity gains can be estimated by what fraction of tasks are impacted and average task-level cost savings. Predicted TFP gains over the next 10 years could be modest. They showed theoretically that even when AI improves the productivity of low-skill workers in certain tasks it may increase rather than reduce inequality. Empirically, they found that AI advances are unlikely to increase inequality as much as previous automation technologies and there is no evidence that AI will reduce labor income inequality. According to the researchers AI is predicted to widen the gap between capital and labor income, some of the new tasks created by AI may have negative social value. They discussed how to incorporate the macroeconomic effects of new tasks that may have negative social value… read more. Open Access TECHNICAL ARTICLEÂ