How does Artificial Intelligence (AI) impact economies?

About me

• Economic Scientific Research Institute under the Ministry of Economy of Azerbaijan Republic
• Phd st. & Researcher
• AI, Econometrics, R language, Climate related issues

AI

• AI was proposed in 1956 at Dartmouth Conference
• AI is an intelligent system that can act by analyzing the environment and exhibiting behavior at different levels of autonomy
• AI can play games, control and browse the internet, perform mathematical operations, recognise patterns and solve problems
• AI helps to obtain faster and error-free results in the entire range of human activities bith individual and collective

AI impacts …

• All the spheres of our life
• Study, work, social life and all kinds of leisure activities
• AI can improve how people work
• AI can make overall production more effective

AI economic implications

• Faster, costly, better products and services
• Better welfare for all of us

AI and economic growth

• The companies and countries that use AI in production achieve higher growth
• AI = more growth
• Although AI has potential pitfalls, humanity needs to learn how to use it for the better future

AI and labor market

• AI has the potential to drastically affect labor market
• Both in short-term and in long-term
• In the short-term it will lead to massive unemployment
• There may be some lag, so that people may feel this a little bit later

The times when there were no AI

• K, L
• The problem is to optimize the capital and Labor quantity
• Several Authors mention percentages of jobs in developed countries that are under high risk (Arntz et al. , Nedelskoska & Quintini)
• Only 36 percent are prepared for the techno changes (London Executive network)

After the inception of AI into every kind of production

• K, L, T
• The new problem is to optimize Technology added to the equation
• AI will hopefully bring about incresing number of employment

Technological unemployment

• AI can help to increase the capacity of human
• There are both opportunities and threats
• Opportunities are the possibility of making better outputs
• Threats are the possibility of ending the employment of the worker

AI and unemployment

• Compensation theory (Adam Smith, Karl Max, John keynes)
• Massive technological unemployment
• People should be compensated because they face unemployment due to technology advancements
• Structural unemployment

AI and increased employment

• AI will drive monotone, repetetive jobs out
• Both blue and white collar jobs are at risk
• AI has the potential to replace all the employment opportunities that do not have personal judgement and personal expertise component
• New jobs will require higher knowledge of technology and skills

Thank you for your attention