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Economic Policy Challenges for the Age of AI

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  • Korinek, Anton

Abstract

This paper examines the profound challenges that transformative advances in AI towards Artificial General Intelligence (AGI) will pose for economists and economic policymakers. I examine how the Age of AI will revolutionize the basic structure of our economies by diminishing the role of labor, leading to unprecedented productivity gains but raising concerns about job disruption, income distribution, and the value of education and human capital. I explore what roles may remain for labor post-AGI, and which production factors will grow in importance. The paper then identifies eight key challenges for economic policy in the Age of AI: (1) inequality and income distribution, (2) education and skill development, (3) social and political stability, (4) macroeconomic policy, (5) antitrust and market regulation, (6) intellectual property, (7) environmental implications, and (8) global AI governance. It concludes by emphasizing how economists can contribute to a better understanding of these challenges.

Suggested Citation

  • Korinek, Anton, 2024. "Economic Policy Challenges for the Age of AI," CEPR Discussion Papers 19539, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:19539
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    Cited by:

    1. is not listed on IDEAS
    2. Pascal Stiefenhofer, 2025. "Artificial General Intelligence and the Social Contract: A Dynamic Political Economy Model," Journal of Economic Analysis, Anser Press, vol. 4(3), pages 142-183, September.
    3. Christian Gschwendt & Claudio Schilter, 2026. "Automation in the Wake of GenAI: Implications for Firm Training," Economics of Education Working Paper Series 0252, University of Zurich, Department of Business Administration (IBW).
    4. Goller, Daniel & Gschwendt, Christian & Wolter, Stefan C., 2025. "This time it’s different – Generative artificial intelligence and occupational choice," Labour Economics, Elsevier, vol. 95(C).
    5. Zarifhonarvar, Ali, 2026. "Generating inflation expectations with large language models," Journal of Monetary Economics, Elsevier, vol. 157(C).
    6. Liu, Yan & Wang, He & Yu, Shu, 2025. "Labor Demand in the Age of Generative AI : Early Evidence from the U.S. Job Posting Data," Policy Research Working Paper Series 11263, The World Bank.
    7. Keloharju, Matti & Keluharju, Roope, 2025. "Accounting Research in the Age of AI," Working Paper Series 1528, Research Institute of Industrial Economics, revised 29 Jul 2025.

    More about this item

    Keywords

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    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • 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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