Forks in the Road: Modelling the Economic Prospects of Artificial Intelligence

The incredible velocity at which artificial intelligence (AI) is changing the economic landscape poses unprecedented challenges to decision-makers, policy advisers, and academic researchers. At this stage of development, more than offering definitive answers, economic science should be prepared to raise the right questions: will AI lead us to a utopian future of sustained economic growth, balanced income distribution, and business opportunities for all, or must we be prepared to face a dark dystopia of slow growth, sharp income inequality, and large corporations that operate virtually without the need for human labour? There are many forks in the road and the direction we will follow is, by no means, at the current stage of knowledge, completely clear. This paper puts into perspective the mentioned bifurcation paths, first through a selective literature survey and, second, by assembling a stylised model of potential substitution of human labour by AI.