From: Doug Bailey (Doug.Bailey@ey.com)
Date: Sun Oct 04 1998 - 19:40:38 MDT
Let me qualify my remarks by saying I know just enough about
economics to make me dangerous [though one of the transfer pricing
economists I work says that is an apt description for all
economists also :) ].
I noticed you used a neo-classical growth model and exogenous growth
functions as the basis for your analysis. Might endogenous growth
theory be a better fit for the AI scenario? Or at least wouldn't it
be interesting to see what predictions an endogenous model might
make? From what I remember of endogenous growth theory, the way it
models growth seems to match better an economy where AI was
advanced.
Another area that might warrant further review is the neo-classical
idea of diminishing returns. I know Paul Romer alleged that the
diminishing returns problem might not apply if capital was expanded
to include human capital. However, an interesting analysis (which I'm
not capable of performing :) ) is what would happen to diminishing
returns where capital became based largely on knowledge, heuristics,
and other AI areas. Coupled with the idea of positive feedback from
technological change (and AI development, e.g. Vinge's singularity),
it looks like a strong case could be made to throw diminishing returns
out the window (or at least put it in the closet and see what the models
do then).
One last point is the idea of efficiency. I read a paper a year or so ago
in the Journal of Economic Perspectives (I'll try and locate it but can't at
the moment) that stated some poor countries would do well not to worry about
acquiring more of the right resources but instead work towards wasting less
of their existing resources. What impact might a drastically increased
efficiency in capital utilization have on growth models? How would this
potential effect of AI-development be factored in to growth models?
Doug Bailey
doug.bailey@ey.com
transhuman@mindpsring.com
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