IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16766.html
   My bibliography  Save this paper

Artificial Intelligence and the Discovery of New Ideas: Is an Economic Growth Explosion Imminent?

Author

Listed:
  • Almeida, Derick

    (University of Coimbra)

  • Naudé, Wim

    (RWTH Aachen University)

  • Sequeira, Tiago Neves

    (University of Coimbra)

Abstract

Theory predicts that global economic growth will stagnate and even come to an end due to slower and eventually negative growth in population. It has been claimed, however, that Artificial Intelligence (AI) may counter this and even cause an economic growth explosion. In this paper, we critically analyse this claim. We clarify how AI affects the ideas production function (IPF) and propose three models relating innovation, AI and population: AI as a research-augmenting technology; AI as researcher scale enhancing technology; and AI as a facilitator of innovation. We show, performing model simulations calibrated on USA data, that AI on its own may not be sufficient to accelerate the growth rate of ideas production indefinitely. Overall, our simulations suggests that an economic growth explosion would only be possible under very specific and perhaps unlikely combinations of parameter values. Hence we conclude that it is not imminent.

Suggested Citation

  • Almeida, Derick & Naudé, Wim & Sequeira, Tiago Neves, 2024. "Artificial Intelligence and the Discovery of New Ideas: Is an Economic Growth Explosion Imminent?," IZA Discussion Papers 16766, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16766
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16766.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nicholas Bloom & Charles I. Jones & John Van Reenen & Michael Webb, 2020. "Are Ideas Getting Harder to Find?," American Economic Review, American Economic Association, vol. 110(4), pages 1104-1144, April.
    2. Kathryn Tunyasuvunakool & Jonas Adler & Zachary Wu & Tim Green & Michal Zielinski & Augustin Žídek & Alex Bridgland & Andrew Cowie & Clemens Meyer & Agata Laydon & Sameer Velankar & Gerard J. Kleywegt, 2021. "Highly accurate protein structure prediction for the human proteome," Nature, Nature, vol. 596(7873), pages 590-596, August.
    3. Romer, Paul, 1993. "Idea gaps and object gaps in economic development," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 543-573, December.
    4. Phil De Luna & Jennifer Wei & Yoshua Bengio & Alán Aspuru-Guzik & Edward Sargent, 2017. "Use machine learning to find energy materials," Nature, Nature, vol. 552(7683), pages 23-27, December.
    5. Yasser Abdih & Frederick Joutz, 2006. "Relating the Knowledge Production Function to Total Factor Productivity: An Endogenous Growth Puzzle," IMF Staff Papers, Palgrave Macmillan, vol. 53(2), pages 1-3.
    6. Michael Kremer, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 551-575.
    7. Wim Naudé, 2021. "Artificial intelligence: neither Utopian nor apocalyptic impacts soon," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(1), pages 1-23, January.
    8. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    9. Boikos, Spyridon & Bucci, Alberto & Sequeira, Tiago Neves, 2023. "May human capital rescue the Empty Planet?," Economics Letters, Elsevier, vol. 232(C).
    10. Sequeira, Tiago Neves & Gil, Pedro Mazeda & Afonso, Oscar, 2018. "Endogenous growth and entropy," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 100-120.
    11. Gries, Thomas & Naude, Wim, 2020. "Artificial Intelligence, Income Distribution and Economic Growth," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224623, Verein für Socialpolitik / German Economic Association.
    12. Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," American Economic Review, American Economic Association, vol. 107(5), pages 174-179, May.
    13. Tiago Neves Sequeira & Pedro Cunha Neves, 2020. "Stepping on toes in the production of knowledge: a meta-regression analysis," Applied Economics, Taylor & Francis Journals, vol. 52(3), pages 260-274, January.
    14. Ashish Arora & Sharon Belenzon & Luis A. Rios, 2011. "The Organization of R&D in American Corporations: The Determinants and Consequences of Decentralization," NBER Working Papers 17013, National Bureau of Economic Research, Inc.
    15. Charles I. Jones, 2019. "Paul Romer: Ideas, Nonrivalry, and Endogenous Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 859-883, July.
    16. John Jumper & Richard Evans & Alexander Pritzel & Tim Green & Michael Figurnov & Olaf Ronneberger & Kathryn Tunyasuvunakool & Russ Bates & Augustin Žídek & Anna Potapenko & Alex Bridgland & Clemens Me, 2021. "Highly accurate protein structure prediction with AlphaFold," Nature, Nature, vol. 596(7873), pages 583-589, August.
    17. Jakob B. Madsen, 2008. "Economic Growth, TFP Convergence and the World Export of Ideas: A Century of Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 145-167, March.
    18. Philip Ball, 2023. "Is AI leading to a reproducibility crisis in science?," Nature, Nature, vol. 624(7990), pages 22-25, December.
    19. Charles I. Jones, 2022. "The Past and Future of Economic Growth: A Semi-Endogenous Perspective," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 125-152, August.
    20. Derick Almeida & Tiago Neves Sequeira, 2023. "Fertility choices, Demographics and Automation," CeBER Working Papers 2023-05, Centre for Business and Economics Research (CeBER), University of Coimbra.
    21. Ribeiro, Barbara & Meckin, Robert & Balmer, Andrew & Shapira, Philip, 2023. "The digitalisation paradox of everyday scientific labour: How mundane knowledge work is amplified and diversified in the biosciences," Research Policy, Elsevier, vol. 52(1).
    22. Hanchen Wang & Tianfan Fu & Yuanqi Du & Wenhao Gao & Kexin Huang & Ziming Liu & Payal Chandak & Shengchao Liu & Peter Katwyk & Andreea Deac & Anima Anandkumar & Karianne Bergen & Carla P. Gomes & Shir, 2023. "Scientific discovery in the age of artificial intelligence," Nature, Nature, vol. 620(7972), pages 47-60, August.
    23. Shyama V. Ramani & Mhamed-Ali El-Aroui & Myriam Carrère, 2008. "On estimating a knowledge production function at the firm and sectoral level using patent statistics," Post-Print hal-00365396, HAL.
    24. Charles I. Jones, 2022. "The End of Economic Growth? Unintended Consequences of a Declining Population," American Economic Review, American Economic Association, vol. 112(11), pages 3489-3527, November.
    25. Hanchen Wang & Tianfan Fu & Yuanqi Du & Wenhao Gao & Kexin Huang & Ziming Liu & Payal Chandak & Shengchao Liu & Peter Katwyk & Andreea Deac & Anima Anandkumar & Karianne Bergen & Carla P. Gomes & Shir, 2023. "Publisher Correction: Scientific discovery in the age of artificial intelligence," Nature, Nature, vol. 621(7978), pages 33-33, September.
    26. William D. Nordhaus, 2021. "Are We Approaching an Economic Singularity? Information Technology and the Future of Economic Growth," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 299-332, January.
    27. Helge Kragh, 2024. "How Einstein built on the past to make his breakthroughs," Nature, Nature, vol. 625(7996), pages 655-656, January.
    28. Klüppel, Leonardo & Knott, Anne Marie, 2023. "Are ideas being fished out?," Research Policy, Elsevier, vol. 52(2).
    29. Neves, Pedro Cunha & Sequeira, Tiago Neves, 2018. "Spillovers in the production of knowledge: A meta-regression analysis," Research Policy, Elsevier, vol. 47(4), pages 750-767.
    30. Ang, James B. & Madsen, Jakob B., 2015. "What Drives Ideas Production Across The World?," Macroeconomic Dynamics, Cambridge University Press, vol. 19(1), pages 79-115, January.
    31. Ege Erdil & Tamay Besiroglu, 2023. "Explosive growth from AI automation: A review of the arguments," Papers 2309.11690, arXiv.org, revised Oct 2023.
    32. Wim Naudé, 2022. "From the entrepreneurial to the ossified economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(1), pages 105-131.
    33. Parteka, Aleksandra & Kordalska, Aleksandra, 2023. "Artificial intelligence and productivity: global evidence from AI patent and bibliometric data," Technovation, Elsevier, vol. 125(C).
    34. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    35. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    36. Ramani, Shyama V. & El-Aroui, Mhamed-Ali & Carrère, Myriam, 2008. "On estimating a knowledge production function at the firm and sector level using patent statistics," Research Policy, Elsevier, vol. 37(9), pages 1568-1578, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Naudé, Wim, 2024. "Is the Scholarly Field of Entrepreneurship at Its End?," IZA Discussion Papers 16916, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wim Naudé, 2022. "From the entrepreneurial to the ossified economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(1), pages 105-131.
    2. Naudé, Wim, 2020. "From the Entrepreneurial to the Ossified Economy: Evidence, Explanations and a New Perspective," GLO Discussion Paper Series 539, Global Labor Organization (GLO).
    3. Naudé, Wim, 2023. "Melancholy Hues: The Futility of Green Growth and Degrowth, and the Inevitability of Societal Collapse," IZA Discussion Papers 16139, Institute of Labor Economics (IZA).
    4. Naudé, Wim, 2019. "The Decline in Entrepreneurship in the West: Is Complexity Ossifying the Economy?," IZA Discussion Papers 12602, Institute of Labor Economics (IZA).
    5. Neves, Pedro Cunha & Sequeira, Tiago Neves, 2018. "Spillovers in the production of knowledge: A meta-regression analysis," Research Policy, Elsevier, vol. 47(4), pages 750-767.
    6. Naudé, Wim, 2023. "We Already Live in a Degrowth World, and We Do Not like It," IZA Discussion Papers 16191, Institute of Labor Economics (IZA).
    7. Catarina Peralta & Pedro Mazeda Gil, 2021. "Automation, Education, and Population: Dynamic Effects in an OLG Growth and Fertility Model," CEF.UP Working Papers 2102, Universidade do Porto, Faculdade de Economia do Porto.
    8. Stefano Bianchini & Moritz Muller & Pierre Pelletier, 2023. "Drivers and Barriers of AI Adoption and Use in Scientific Research," Papers 2312.09843, arXiv.org, revised Feb 2024.
    9. Herzer Dierk, 2022. "Semi-endogenous Versus Schumpeterian Growth Models: A Critical Review of the Literature and New Evidence," Review of Economics, De Gruyter, vol. 73(1), pages 1-55, April.
    10. Sequeira, Tiago Neves & Gil, Pedro Mazeda & Afonso, Oscar, 2018. "Endogenous growth and entropy," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 100-120.
    11. Gomes Orlando, 2024. "Economic Growth in the Age of Ubiquitous Threats: How Global Risks are Reshaping Growth Theory," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 18(1), pages 1-15, January.
    12. Bucci, Alberto & Carbonari, Lorenzo & Gil, Pedro Mazeda & Trovato, Giovanni, 2021. "Economic growth and innovation complexity: An empirical estimation of a Hidden Markov Model," Economic Modelling, Elsevier, vol. 98(C), pages 86-99.
    13. Basso, Henrique S. & Jimeno, Juan F., 2021. "From secular stagnation to robocalypse? Implications of demographic and technological changes," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 833-847.
    14. Czarnitzki, Dirk & Fernández, Gastón P. & Rammer, Christian, 2023. "Artificial intelligence and firm-level productivity," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 188-205.
    15. Evangelos Katsamakas & Oleg V. Pavlov & Ryan Saklad, 2024. "Artificial intelligence and the transformation of higher education institutions," Papers 2402.08143, arXiv.org.
    16. Gries, Thomas & Naudé, Wim, 2022. "Modelling artificial intelligence in economics," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 56, pages 1-12.
    17. Philippe Aghion & Benjamin F. Jones & Charles I. Jones, 2018. "Artificial Intelligence and Economic Growth," NBER Chapters, in: The Economics of Artificial Intelligence: An Agenda, pages 237-282, National Bureau of Economic Research, Inc.
    18. Barbara Annicchiarico & Valentina Antonaroli & Alessandra Pelloni, 2022. "Optimal factor taxation in a scale free model of vertical innovation," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 794-830, April.
    19. Parteka, Aleksandra & Kordalska, Aleksandra, 2023. "Artificial intelligence and productivity: global evidence from AI patent and bibliometric data," Technovation, Elsevier, vol. 125(C).
    20. Serguei Kaniovski & Thomas Url & Helmut Hofer & Viola Garstenauer, 2021. "A Long-run Macroeconomic Model of the Austrian Economy (A-LMM 2.0). New Results (2021)," WIFO Studies, WIFO, number 67377, April.

    More about this item

    Keywords

    automation; artificial intelligence; economic growth; innovation; ideas production function;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp16766. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.