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AI and Our Economic Future

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  • Charles I. Jones

Abstract

Artificial intelligence (AI) will likely be the most transformative technology of the modern era. What if machines—AI for cognitive tasks and AI plus advanced robots for physical tasks—can perform every task a human can? This essay makes three main points. First, even though US growth rates have been stable at roughly 2 percent per year for 150 years, it is distinctly possible that automating intelligence leads economic growth rates to accelerate. Second, this acceleration is likely to be slowed by the presence of "weak links." While we each have access to 100 million times more transistors on our desktop computer than people in the 1970s, we are not 100 million times more productive. Computers can invert matrices at lightning speed, but we humans must still decide what matrix to invert, what hypothesis to test, and so on. Accelerating economic growth requires the vast majority of the weak links to be automated away, which delays the large gains. Finally, even though weak links slow the benefits, they may actually speed up the risks. When a chain is only as strong as its weakest link, damaging one link in the chain can be very costly. A powerful AI that is superhuman at software engineering could be misused by a bad actor to do substantial harm by hacking the financial system or a virology lab.

Suggested Citation

  • Charles I. Jones, 2026. "AI and Our Economic Future," Journal of Economic Perspectives, American Economic Association, vol. 40(3), pages 3-22, Summer.
    • Handle: RePEc:aea:jecper:v:40:y:2026:i:3:p:3-22
    DOI: 10.1257/jep.20261505
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    JEL classification:

    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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