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Artificial Intelligence and the Discovery of New Ideas: Is an Economic Growth Explosion Imminent?

Author

Listed:
  • Almeida, Derick

    (University of Coimbra)

  • Naudé, Wim

    (RWTH Aachen University)

  • Sequeira, Tiago Neves

    (University of Coimbra)

Abstract

Theory predicts that global economic growth will stagnate and even come to an end due to slower and eventually negative growth in population. It has been claimed, however, that Artificial Intelligence (AI) may counter this and even cause an economic growth explosion. In this paper, we critically analyse this claim. We clarify how AI affects the ideas production function (IPF) and propose three models relating innovation, AI and population: AI as a research-augmenting technology; AI as researcher scale enhancing technology; and AI as a facilitator of innovation. We show, performing model simulations calibrated on USA data, that AI on its own may not be sufficient to accelerate the growth rate of ideas production indefinitely. Overall, our simulations suggests that an economic growth explosion would only be possible under very specific and perhaps unlikely combinations of parameter values. Hence we conclude that it is not imminent.

Suggested Citation

  • Almeida, Derick & Naudé, Wim & Sequeira, Tiago Neves, 2024. "Artificial Intelligence and the Discovery of New Ideas: Is an Economic Growth Explosion Imminent?," IZA Discussion Papers 16766, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16766
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    References listed on IDEAS

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    Cited by:

    1. Naudé, Wim, 2024. "Is the Scholarly Field of Entrepreneurship at Its End?," IZA Discussion Papers 16916, Institute of Labor Economics (IZA).
    2. Naudé, Wim, 2024. "What They Don't Teach You about Artificial Intelligence at Business School: Stagnation, Oil, and War," IZA Discussion Papers 17306, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    automation; artificial intelligence; economic growth; innovation; ideas production function;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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