Generative AI: Catalyst for Growth or Harbinger of Premature De-Professionalization ?

Yan Liu

No 10915, Policy Research Working Paper Series from The World Bank

Abstract: This paper presents a multi-sector growth model to elucidate the general equilibrium effects of generative artificial intelligence on economic growth, structural transformation, and international production specialization. Using parameters from the literature, the paper employs simulations to quantify the impacts of artificial intelligence across various scenarios. The paper introduces a crucial distinction between high-skill, highly digitalized, tradable services and low-skill, less digitalized, less-tradable services. The model’s key propositions align with empirical evidence, and the simulations yield novel and sobering predictions. Unless artificial intelligence achieves widespread cross-sector adoption and catalyzes paradigm-shifting innovations that fundamentally reshape consumer preferences, its growth benefits may be limited. Conversely, its disruptive impact on labor markets could be profound. This paper highlights the risk of “premature de-professionalization”, where artificial intelligence likely shrinks the space for countries to generate well-paid jobs in high-skill services. The analysis portends that developing countries failing to adopt artificial intelligence swiftly risk entrapment as commodity exporters, potentially facing massive youth underemployment, diminishing social mobility, and stagnating or even declining living standards. The paper also discusses artificial intelligence’s broader implications on inequality, exploring multiple channels through which it may exacerbate or mitigate economic disparities.

Date: 2024-09-17
New Economics Papers: this item is included in nep-ain, nep-cmp, nep-gro and nep-mac
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://documents.worldbank.org/curated/en/0995200 ... 11d-e9f762ce51e5.pdf (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:wbk:wbrwps:10915

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().