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6 - Artificial Intelligence Technologies and Aggregate Growth Prospects

from Part III - Implications of Technology for Growth

Published online by Cambridge University Press:  21 October 2021

By
Timothy Bresnahan
Edited by
John W. Diamond  and
George R. Zodrow
John W. Diamond
Affiliation:
Rice University, Houston
George R. Zodrow
Affiliation:
Rice University, Houston
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Summary

Artificial Intelligence Technologies (AITs) are already in large-scale use in two kinds of applications: consumer–product matching engines and user interfaces. AITs are core production technologies with hundreds of billions of dollars in revenue that involve no substitution of machine for human work at the task level; instead, there is capital deepening, not factor substitution, at the task level. The alternative – system-level substitution – is driven as much or more by output characteristics as by cost. With respect to long-run factor demand implications, there is no good reason to see AITs as different from other information and communication technologies (ICT) – they work at the system level to slowly change to a more capital-intensive, less labor-intensive, and more human-capital-intensive form of production and their early diffusion seems similar. Their largest impact is in a narrow range of industries and functions, notably consumer-oriented mass-market production, distribution, and marketing. Examining the strengths and weaknesses of AIT-based production illuminates both the narrowness and the depth of ICT application.

Keywords

consumer matching applicationsmodularizationartificial intelligence technologiesinformation and communication technologiesscale economies
Type
Chapter
Information
Prospects for Economic Growth in the United States , pp. 132 - 170
Publisher: Cambridge University Press
Print publication year: 2021

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