Artificial Intelligence and the Discovery of New Ideas: Is an Economic Growth Explosion Imminent?

Derick Almeida, Wim Naudé and Tiago Sequeira

No 16766, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Theory predicts that global economic growth will stagnate and even come to an end due to slower and eventually negative growth in population. It has been claimed, however, that Artificial Intelligence (AI) may counter this and even cause an economic growth explosion. In this paper, we critically analyse this claim. We clarify how AI affects the ideas production function (IPF) and propose three models relating innovation, AI and population: AI as a research-augmenting technology; AI as researcher scale enhancing technology; and AI as a facilitator of innovation. We show, performing model simulations calibrated on USA data, that AI on its own may not be sufficient to accelerate the growth rate of ideas production indefinitely. Overall, our simulations suggests that an economic growth explosion would only be possible under very specific and perhaps unlikely combinations of parameter values. Hence we conclude that it is not imminent.

Keywords: automation; artificial intelligence; economic growth; innovation; ideas production function (search for similar items in EconPapers)
JEL-codes: J11 J24 O31 O33 O40 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2024-01
New Economics Papers: this item is included in nep-cmp, nep-gro, nep-ino, nep-lma and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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