Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236372 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14341
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," Acemoglu and Restrepo (2018b) combine the task-based model of the labor market with an endogenous growth model to model the economic consequences of artificial intelligence (AI). This paper provides an alternative endogenous growth model that addresses two shortcomings of their model. First, we replace the assumption of a representative household with the premise of two groups of households with different preferences. This allows our model to be demand constrained and able to model the consequences of higher income inequality due to AI. Second, we model AI as providing abilities, arguing that "abilities" better characterises the nature of the services that AI provide, rather than tasks or skills. The dynamics of the model regarding the impact of AI on jobs, inequality, wages, labor productivity and long-run GDP growth are explored.
Subjects: 
technology
artificial intelligence
productivity
labor demand
income distribution
growth theory
JEL: 
O47
O33
J24
E21
E25
Document Type: 
Working Paper

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