Macroeconomics and Applied Economics Seminar 2018-2019
joint with the Département de sciences économiques, Université de Montréal
room C-6149 (U. of Montreal, Pavillon Lionel-Groulx, 3150 Jean-Brillant Street)
Rapid advances in AI imply that machines increasingly behave like artificially intelligent agents (AIAs). This raises fundamental questions about what an economy with AIAs will look like – questions that stretch from the allocation of resources between humans and non-humans to the potential for an existential race. Generalizing the concept of agency, we develop an economic framework that describes humans and AIAs symmetrically as goal-oriented entities that each absorb scarce resources, exhibit defined behavior and are subject to laws of motion. Going beyond the concept of property rights, we observe that what is economically relevant is the effective control over resources exerted by the different entities, which we capture by a point on a resource allocation frontier. We describe several mechanisms that provide AIAs with control over resources, both within and outside of our human system of property rights. In a number of our scenarios, competition over scarce factors eventually reduces human absorption. We also describe the limit case of an AIA-only economy, in which AIAs both produce and absorb large quantities of output without any role for humans, rejecting the fallacy that human demand is necessary to support economic activity. Finally, we discuss a number of recent macroeconomic trends that we interpret as harbingers of the rise of AIAs, and we discuss policy interventions to preserve positive human absorption.