Re: Economic Growth Assuming Machine Intelligence

Robin Hanson (hanson@econ.berkeley.edu)
Mon, 05 Oct 1998 09:27:17 -0700

Thank you Doug Bailey for some thoughtful comments!

Doug Bailey writes:
>I noticed you used a neo-classical growth model and exogenous growth
>functions as the basis for your analysis. Might endogenous growth
>theory be a better fit for the AI scenario? Or at least wouldn't it
>be interesting to see what predictions an endogenous model might
>make? From what I remember of endogenous growth theory, the way it
>models growth seems to match better an economy where AI was
>advanced.

It is easier to get more variation in growth rates with endogenous growth models, and there is also less consensus on how to model endogenous growth. So to avoid the accusation that I cooked my big growth speedup implications, I choose to use exogenous growth. This may provide a conservative estimate of growth implications. But yes, it would be interesting to try the simplest endogenous growth model, which I think is the AK model.

>Another area that might warrant further review is the neo-classical
>idea of diminishing returns. I know Paul Romer alleged that the
>diminishing returns problem might not apply if capital was expanded
>to include human capital.

This isn't another area. The essense of endogenous growth models is that they eliminate diminishing returns.

>What impact might a drastically increased
>efficiency in capital utilization have on growth models? How would this
>potential effect of AI-development be factored in to growth models?

Unless you forsee particular reasons to expect a change in the *rate* at which such utilization becomes more efficient, this effect is already included in the standard models of exogenous growth.

Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/ RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884 140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614