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The optimal (`equilibrium') macroscopic properties of an economy with $N$ industries endowed with different technologies, $P$ commodities and one consumer are derived in the limit $N\to\infty$ with $n=N/P$ fixed using the replica method.…
Standard economic theory uses mathematics as its main means of understanding, and this brings clarity of reasoning and logical power. But there is a drawback: algebraic mathematics restricts economic modeling to what can be expressed only…
This paper derives `Scaling Laws for Economic Impacts' -- empirical relationships between the training compute of Large Language Models (LLMs) and professional productivity. In a preregistered experiment, over 500 consultants, data…
Quantifying the workplace productivity effects of Generative Artificial Intelligence is now central to economics, management, and public policy. The deployment of AI tools in customer service, writing, software development, and consulting…
In the times we live in today, humanity faces unprecedented environmental challenges. The emergence of artificial intelligence (AI) has opened new doors in our collective efforts to address our planet's pressing problems; however, many have…
We introduce the notion of performative power, which measures the ability of a firm operating an algorithmic system, such as a digital content recommendation platform, to cause change in a population of participants. We relate performative…
What will likely be the effect of the emergence of ChatGPT and other forms of artificial intelligence (AI) on the skill premium? To address this question, we develop a nested constant elasticity of substitution production function that…
Task-based models of AI and labor hold organizational structure fixed. We introduce agent capital: AI that reduces coordination costs, expanding spans of control and enabling endogenous task creation. Five propositions characterize how…
We propose a simple model that describes the dynamics of efficiencies of competing agents. Agents communicate leading to increase of efficiencies of underachievers, and an efficiency of each agent can increase or decrease irrespectively of…
We investigate whether and why people might adjust compensation for workers who use AI tools. Across 13 studies (N = 4,956), participants consistently lowered compensation for workers who used AI compared to those who did not. This "AI…
Generative AI is directional: it performs well in some task directions and poorly in others. Knowledge work is directional and endogenous as well: workers can satisfy the same job requirements with different mixes of tasks. We develop a…
We study the effects of introducing information inefficiency in a model for a random linear economy with a representative consumer. This is done by considering statistical, instead of classical, economic general equilibria. Employing two…
If wealthier people have advantages in having higher returns than poor, inequality will unequivocally increase, but is equal opportunity enough to prevent it? According to several models in economics and econophysics, no. They all display…
Throughout the modern era, when new technologies displaced workers, societies adapted through the same mechanism: education raised the cognitive ceiling, producing workers capable of tasks machines could not yet reach. Generative AI may be…
This paper examines the profound challenges that transformative advances in AI towards Artificial General Intelligence (AGI) will pose for economists and economic policymakers. I examine how the Age of AI will revolutionize the basic…
In recent years, it has been debated whether a reduction in working hours would be a viable solution to tackle the unemployment caused by technological change. The improvement of existing production technology is gradually being seen to…
We model a dynamic data economy with fully endogenous growth where agents generate data from consumption and share them with innovation and production firms. Different from other productive factors such as labor or capital, data are…
Artificial intelligence (AI) can revolutionize the development industry, primarily electrical and electronics engineering. By automating recurring duties, AI can grow productivity and efficiency in creating. For instance, AI can research…
Artificial intelligence (AI) has moved to the center of policy, market, and academic debates, but its macroeconomic footprint is still only partly understood. This paper provides an overview on how the current AI wave is captured in US…
Artificial intelligence (AI) raises expectations of substantial increases in rates of technological and scientific progress, but such anticipations are often not connected to detailed ground-level studies of AI use in innovation processes.…