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AI and the Economy

Author

Listed:
  • Jason Furman
  • Robert Seamans

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 start-ups, and patent counts—there is evidence of a large increase in AI-related activity. We also review recent research in this area that 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.

Suggested Citation

  • Jason Furman & Robert Seamans, 2019. "AI and the Economy," Innovation Policy and the Economy, University of Chicago Press, vol. 19(1), pages 161-191.
    • Handle: RePEc:ucp:ipolec:doi:10.1086/699936
    DOI: 10.1086/699936
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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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