From: Robin Hanson (hanson@econ.berkeley.edu)
Date: Mon Oct 05 1998 - 10:27:17 MDT
Thank you Doug Bailey for some thoughtful comments!
Doug Bailey writes:
>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.
It is easier to get more variation in growth rates with endogenous
growth models, and there is also less consensus on how to model
endogenous growth. So to avoid the accusation that I cooked my big
growth speedup implications, I choose to use exogenous growth.
This may provide a conservative estimate of growth implications.
But yes, it would be interesting to try the simplest endogenous
growth model, which I think is the AK model.
>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.
This isn't another area. The essense of endogenous growth models
is that they eliminate diminishing returns.
>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?
Unless you forsee particular reasons to expect a change in the *rate*
at which such utilization becomes more efficient, this effect is already
included in the standard models of exogenous growth.
Robin Hanson
hanson@econ.berkeley.edu http://hanson.berkeley.edu/
RWJF Health Policy Scholar, Sch. of Public Health 510-643-1884
140 Warren Hall, UC Berkeley, CA 94720-7360 FAX: 510-643-8614
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