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Modelling Artificial Intelligence in Economics

Author

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  • Gries, Thomas

    (University of Paderborn)

  • Naudé, Wim

    (RWTH Aachen University)

Abstract

Economists' two main theoretical approaches to understanding Artificial Intelligence (AI) impacts have been the task-approach to labor markets and endogenous growth theory. Therefore, the recent integration of the task-approach into an endogenous growth model by Acemoglu and Restrepo (AR) is a useful advance. However, it is subject to the shortcoming that it does not explicitly model AI and its technological feasibility. The AR model focuses on tasks and skills but not on abilities, while abilities better characterize AI services' nature. This paper addresses this shortcoming by elaborating the task-approach with AI abilities for use within endogenous growth models. This more ability-sensitive specification of the task-approach allows for more nuanced and realistic impacts of progress in artificial intelligence (AI) on the economy to be captured.

Suggested Citation

  • Gries, Thomas & Naudé, Wim, 2021. "Modelling Artificial Intelligence in Economics," IZA Discussion Papers 14171, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14171
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    Cited by:

    1. Sagarika Mishra & Michael T. Ewing & Holly B. Cooper, 2022. "Artificial intelligence focus and firm performance," Journal of the Academy of Marketing Science, Springer, vol. 50(6), pages 1176-1197, November.
    2. Wang, Linhui & Cao, Zhanglu & Dong, Zhiqing, 2023. "Are artificial intelligence dividends evenly distributed between profits and wages? Evidence from the private enterprise survey data in China," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 342-356.
    3. Castillo, Victhalia Zapata & Boer, Harmen-Sytze de & Muñoz, Raúl Maícas & Gernaat, David E.H.J. & Benders, René & van Vuuren, Detlef, 2022. "Future global electricity demand load curves," Energy, Elsevier, vol. 258(C).
    4. Gries, Thomas & Naudé, Wim, 2021. "The Race of Man and Machine: Implications of Technology When Abilities and Demand Constraints Matter," IZA Discussion Papers 14341, Institute of Labor Economics (IZA).
    5. Umut Erdem & K. Mert Cubukcu, 2022. "The uneven geography of innovation in Turkey: Visualizing the geography and regional relatedness of patent production," Environment and Planning A, , vol. 54(1), pages 7-10, February.

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    More about this item

    Keywords

    Artificial Intelligence; endogenous growth theory; labor economics; mathematical models;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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