Total Output of the Future

Alvin Kurniady

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops a theory of growth with self-learning AI. I decompose “technologies” into a non-self-learning component T(t) and a recursive self-learning term (S(t) D(t)) (t), where (t) = 0 + log(S(t) D(t)) links capability gains to deployed self-learning technologies S and data D. I present two complementary production functions. Version 1 highlights distributional channels by separating AI-complementary vs. AI-substitutable labor and human capital. Version 2 is measurement-oriented, mapping the self-learning stock to AI-specific physical capital, labor forces, and human capital, thereby operationalizing S. The model yields sharp regime conditions: with small/approximately constant (t), the economy exhibits a balanced growth path (BGP); when θ(t) becomes large enough to push effective returns above one, growth accelerates. A log-space recursion implies a quadratic bound for log((SD) (t)), establishing no finite-time singularity. The framework produces testable predictions—notably the need for both linear and quadratic terms in log(SD) in empirical specifications—and clarifies bottlenecks: insufficient AI-specific capital or low-quality data can hold down θ(t) and prevent acceleration even with advanced systems. Policy implications follow directly: scale compute and energy, raise HAI, LAI, and improve data governance/quality. The contribution is conceptual and theory-only, positioning the mechanism for subsequent empirical work while providing a tractable structure for cross-country comparisons in an economy increasingly driven by recursive, autonomous innovation.

Keywords: Self-learning; artificial; intelligence; Economic; growth; theory; Recursive; learning; dynamics; AI-specific; capital; and; labor; Balanced; growth; path; vs.; accelerating; growth; Cross-country; growth; models (search for similar items in EconPapers)
JEL-codes: O41 (search for similar items in EconPapers)
Date: 2025-09-04
New Economics Papers: this item is included in nep-inv
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/126057/1/MPRA_paper_126057.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:126057

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().