Should AI be regulated?

AI: a review of its economic impact and state of regulation

In this paper, Comunale and Manera provide insights from the academic literature on the employment, wage, productivity, and economic growth impacts of AI. the authors also summarize the regulatory actions undertaken in different regions, detailing their rationales, approaches, and areas of coverage. Their key findings include:

Labor market effects:

• Task exposure measures suggest AI may have greater impact on high-skilled, white-collar occupations compared to previous waves of automation.
• However, empirical evidence on actual employment and wage effects is still limited and inconclusive.
• Some studies find AI adoption associated with productivity gains and complementing workers rather than just substituting them.

Productivity and growth:

• Theoretical models suggest AI could significantly boost productivity and economic growth.
• Firm-level studies show AI adoption linked to increased sales, innovation, and productivity, though estimates vary.
• Aggregate productivity impacts are still uncertain, with private sector estimates ranging from 0.1 to 1.5 percentage points of additional annual growth.

Regulation:
Major jurisdictions (EU, US, China) have taken different regulatory approaches:

• EU: Ex-ante risk-based approach with strict rules for high-risk AI systems
• US: More decentralized approach focused on guidelines and principles
• China: Focus on content control and ethical reviews
• Key regulatory concerns include: market competition, privacy, intellectual property, national security, ethics/bias, and financial stability.
• There is a lack of international coordination on AI governance, though some multilateral efforts are emerging.

Knowledge gaps and challenges:

• Limited data availability on latest AI technologies and their economic impacts
• Disconnect between academic research focus and regulatory priorities
• Difficulty balancing innovation promotion with risk mitigation
• Uncertainty around long-term AI capabilities and impacts

Policy recommendations:

• Invest in workforce training and adaptation
• Consider tax policies to balance incentives between human labor and AI capital
• Increase international cooperation on AI governance
• Collect more granular data on AI adoption and impacts
• Bridge gap between research and policy priorities

The Economic Impacts and the Regulation of AI: A Review of the Academic Literature and Policy Actions
Authors: Mariarosaria Comunale, Andrea Manera
From: IMF

Should AI be regulated? The Trans-Atlantic divide

Clark Center’s US and European Panels have weighed in on whether US antitrust investigations were warranted and wider policy concerns. Whilst the questions are not exact matches, that is an unusually wide difference of opinion between the panels. For the Europeans, the case for a US antitrust investigation is almost clearcut with almost three quarters of respondents agreeing and very little active dissension. By contrast, the US panels are far less certain that such investigations will achieve much in the way of lower prices for users of AI or greater competition and innovation within AI.
In the U.S.


In Europe:

Regulating AI (U.S.)
Regulating AI (Europe)
By: Clark Center for Global Markets – Chicago Booth