AI and the Economy

Abstract

We review the evidence that artificial intelligence (AI) is having a large effect on the economy. Across a variety of statistics—including robotics shipments, AI startups, and patent counts—there is evidence of a large increase in AI-related activity. We also review recent research in this area which suggests that AI and robotics have the potential to increase productivity growth but may have mixed effects on labor, particularly in the short run. In particular, some occupations and industries may do well while others experience labor market upheaval. We then consider current and potential policies around AI that may help to boost productivity growth while also mitigating any labor market downsides including evaluating the pros and cons of an AI specific regulator, expanded antitrust enforcement, and alternative strategies for dealing with the labor-market impacts of AI, including universal basic income and guaranteed employment.

Keywords: artificial intelligence, productivity, economic growth, public policy

JEL Classification: J24, L40, L86, O33, O38