The economic impact of AI
Recent reports from Goldman Sachs economists and researchers at OpenAI, anticipate that as many as 300 million full-time jobs could be automated as a result of the latest AI breakthroughs and that two-thirds of workers in Europe and the United States could see at least some of their tasks automated by the introduction of large language models such as ChatGPT.
Diane Coyle, in this commentary, provides a balanced view of the potential harms and benefits for the global economy from the use of generative AI.
On the potential harms:
- Generative AI could be used to reduce costs by replacing workers with algorithms, rather than harnessing the power of these technologies to augment human labor.
- AI technology is complex and it takes time to figure out how best to use it. As a result, only the most technologically sophisticated companies will have the resources and know-how needed to adopt such tools and benefit from them. In this case, AI will not contribute to productivity growth.
On the potential benefits:
But the true potential of these new technologies goes beyond their ability to enable a few companies to become more efficient or develop new products. To provide widespread productivity gains and create real value, generative AI models must change the way we produce things. After all, the most sustained productivity booms of the past 200 years have been the result of new technologies reshaping and rewiring our economic systems.
The promise and peril of Generative AI
By: Diane Coyle – University of Cambridge
AI and private data
Katja Langenbucher explains how regulating AI is an enormously complex exercise:
- There are cases where the combination of machine learning and access to “Big Data” can confer economic advantages as in the case of consumer lending: for lenders, an important information asymmetry is mitigated, for borrowers, a better contract that would not have existed based on a conventional evaluation is possible. AI systems used to evaluate the credit score or creditworthiness of natural persons might also affect the provision of essential services such as housing, electricity, and telecommunication services. Regulation in this case should safeguard citizens’ access to these services.
- With AI protection of private data becomes tricky: EU regulation stipulates that personal data, such as those found on social media platforms or health data should not be used when conducting a creditworthiness assessment. Yet a sophisticated AI can readily reconstruct such information by use of substitute variables, such as frequent Google searches for specific diseases or medications, consumers will hardly benefit from this.
AI-based credit default risk assessments require regulation
By: Katja Langenbucher – Leibniz Institute for Financial Research
