What Economists Are Missing About AI

Economists' wildly different forecasts for AI's economic impact, ranging from under 1% productivity growth to $7 trillion in global output gains, stem from using inconsistent models. A new working paper introduces a unified framework tracking both how much of a job AI can automate and how fast adoption spreads. The model projects $2 trillion in long-run U.S. output gains, 20 million job losses, and a 7-8% permanent price reduction, suggesting gains outweigh costs if labor markets stay flexible and AI markets remain competitive.