Artificial Intelligence in the Knowledge Economy

Enrique Ide and Eduard Talamàs

Journal of Political Economy, 2025, vol. 133, issue 12, 3762 - 3800

Abstract: Artificial intelligence (AI) can transform the knowledge economy by automating noncodifiable work. To analyze this transformation, we incorporate AI into an economy where humans form hierarchical organizations: less knowledgeable individuals become “workers” doing routine work, while others become “solvers” handling exceptions. We model AI as a technology that converts computational resources into “AI agents” that operate autonomously (as coworkers and solvers/copilots) or nonautonomously (solely as copilots). Autonomous AI primarily benefits the most knowledgeable individuals; nonautonomous AI benefits the least knowledgeable. However, output is higher with autonomous AI. These findings reconcile contradictory empirical evidence and reveal trade-offs when regulating AI autonomy.

Date: 2025
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