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    AI could transform society without double-digit GDP growth, a blog author argues

    Automated sectors can shrink as goods get cheaper and spending moves elsewhere, the author says—a reason rapid AI progress may not translate into explosive economic growth.

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    TLDR

    A blog author questions forecasts of double-digit AI-driven growth, arguing that economic models allow explosive growth but rely on assumptions unlikely to hold in practice. As automated goods get cheaper, the author says, spending shifts toward non-automated sectors. In a follow-up, the author stresses that measured GDP growth of 4–5% could still accompany profound societal change. They also argue that vast AI-agent marketplaces would net out as intermediate inputs unless agents were counted as human final consumers.

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    9 Sources, first seen 19d ago

    Combined views

    156.4K

    9 Sources, first seen 19d ago

    952 likes
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    19d ago
    first seen 19d ago
    952 likes
    34 comments
    371 saves
    358 reposts
    34 comments
    371 saves
    358 reposts

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    Positive——Negative

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    No sentiment analysis available yet.

    9 Sources

    @ben_mollQ1: How do you write down a model that delivers 15% AI-driven GDP growth in 2030 like the folks at the Anthropic Institute? A1: It's easy and you can do it in a way any well-trained econ undergrad understands: take a standard Solow model, stick in a task-based production function, calibrate in seemingly innocuous way ➡️ done! See the supplement to the essay with @alexolegimas https://benjaminmoll.com/task_based_solow/ (The Anthropic model is, of course, fancier with many more bells and whistles but the basic logic – AI removes labor as a bottleneck on growth – is the same.) Q2: Does this mean that 15% growth is a reasonable prediction? A2: No. Just because you can write down such a model doesn't mean you should. Just because it's possible in theory, doesn't mean it will actually happen in practice ! Instead you're making a number of assumptions that are unlikely to hold: https://aleximas.substack.com/p/will-ai-soon-lead-to-double-digit
    @sebkrierRT @ben_moll: Q1: How do you write down a model that delivers 15% AI-driven GDP growth in 2030 like the folks at the Anthropic Institute?…
    @modestproposal1Anthropic's economic scenario analysis is interesting. But this is not something you can ignore, this is the most important consideration! "the model cannot generate the negative feedback in which disruption depresses demand and amplifies its own labor-market consequences"
    @Thom_WolfRT @ben_moll: Q1: How do you write down a model that delivers 15% AI-driven GDP growth in 2030 like the folks at the Anthropic Institute?…
    @alexolegimasThanks for all the feedback on the post. One reaction we've been getting is "so you're saying nothing much will change." It's worth clarifying this because that is not at all the point of the post—it's actually quite the opposite. What it's saying is that the economy and society can change profoundly, to become almost unrecognizable, while still resulting in measured GDP growth of "only" 4–5% (which already implies doubling living standards in 15 years). We can get cures for major diseases, agentic transactions can explode, and we could have massive agent-to-agent marketplaces, but this will not show up as double-digit GDP growth precisely because of how GDP is calculated. This is the hallmark of our Assumption 2: the automation of agriculture had absolutely profound societal implications. Before this, people routinely died of starvation and malnutrition—a concern that largely vanished in the developed world. The increase in living standards and the precipitous drop in child mortality had huge welfare consequences, but because automated agricultural goods became so much cheaper, the sector actually shrank as a share of GDP. The same applies to agentic interactions: GDP only counts final output sold to human consumers, not intermediate transactions. Unless agents are counted as humans (final consumers) in the economy, massive agent-to-agent marketplaces net out as intermediate inputs—and even where agents serve humans directly, falling prices shrink their weight in GDP. This is all to say: I expect AI's impact on society to be nearly unprecedented, particularly with respect to human welfare. But you should not be looking at GDP growth numbers for evidence, precisely because some of the biggest welfare improvements will not show up there.
    @wsisaacRT @ben_moll: New essay on @alexolegimas's blog: Will AI Soon Deliver Double-Digit Growth? Probably not. Here is why. https://t.co/QabYH…
    @beffjezosDoomer fable: "ASI will instantly foom, obliterate us and turn us into grey goo overnight" Reality: optimistically boosts GDP growth to 4%

    Sentiment

    Positive——Negative

    Summary

    Not enough discussion yet.

    No sentiment analysis available yet.

    9 Sources

    @ben_mollQ1: How do you write down a model that delivers 15% AI-driven GDP growth in 2030 like the folks at the Anthropic Institute? A1: It's easy and you can do it in a way any well-trained econ undergrad understands: take a standard Solow model, stick in a task-based production function, calibrate in seemingly innocuous way ➡️ done! See the supplement to the essay with @alexolegimas https://benjaminmoll.com/task_based_solow/ (The Anthropic model is, of course, fancier with many more bells and whistles but the basic logic – AI removes labor as a bottleneck on growth – is the same.) Q2: Does this mean that 15% growth is a reasonable prediction? A2: No. Just because you can write down such a model doesn't mean you should. Just because it's possible in theory, doesn't mean it will actually happen in practice ! Instead you're making a number of assumptions that are unlikely to hold: https://aleximas.substack.com/p/will-ai-soon-lead-to-double-digit
    @sebkrierRT @ben_moll: Q1: How do you write down a model that delivers 15% AI-driven GDP growth in 2030 like the folks at the Anthropic Institute?…
    @modestproposal1Anthropic's economic scenario analysis is interesting. But this is not something you can ignore, this is the most important consideration! "the model cannot generate the negative feedback in which disruption depresses demand and amplifies its own labor-market consequences"
    @Thom_WolfRT @ben_moll: Q1: How do you write down a model that delivers 15% AI-driven GDP growth in 2030 like the folks at the Anthropic Institute?…
    @alexolegimasThanks for all the feedback on the post. One reaction we've been getting is "so you're saying nothing much will change." It's worth clarifying this because that is not at all the point of the post—it's actually quite the opposite. What it's saying is that the economy and society can change profoundly, to become almost unrecognizable, while still resulting in measured GDP growth of "only" 4–5% (which already implies doubling living standards in 15 years). We can get cures for major diseases, agentic transactions can explode, and we could have massive agent-to-agent marketplaces, but this will not show up as double-digit GDP growth precisely because of how GDP is calculated. This is the hallmark of our Assumption 2: the automation of agriculture had absolutely profound societal implications. Before this, people routinely died of starvation and malnutrition—a concern that largely vanished in the developed world. The increase in living standards and the precipitous drop in child mortality had huge welfare consequences, but because automated agricultural goods became so much cheaper, the sector actually shrank as a share of GDP. The same applies to agentic interactions: GDP only counts final output sold to human consumers, not intermediate transactions. Unless agents are counted as humans (final consumers) in the economy, massive agent-to-agent marketplaces net out as intermediate inputs—and even where agents serve humans directly, falling prices shrink their weight in GDP. This is all to say: I expect AI's impact on society to be nearly unprecedented, particularly with respect to human welfare. But you should not be looking at GDP growth numbers for evidence, precisely because some of the biggest welfare improvements will not show up there.
    @wsisaacRT @ben_moll: New essay on @alexolegimas's blog: Will AI Soon Deliver Double-Digit Growth? Probably not. Here is why. https://t.co/QabYH…
    @beffjezosDoomer fable: "ASI will instantly foom, obliterate us and turn us into grey goo overnight" Reality: optimistically boosts GDP growth to 4%