Broadening the Gains from Generative AI: The Role of Fiscal Policies
Staff Discussion Notes, June 17, 2024
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- Broadening the Gains from Generative AI: The Role of Fiscal Policies
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Bibliographic details
- Authors: Fernanda Brollo, Era Dabla-Norris, Ruud de Mooij, Daniel Garcia-Macia, Tibor Hanappi, Li Liu, Anh D. M. Nguyen
- Published: June 17, 2024
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9798400277177.006
Summary
- Generative artificial intelligence (gen AI) holds immense potential to boost productivity growth and advance public service delivery, but it also raises profound concerns about massive labor disruptions and rising inequality.
- The note discusses how fiscal policies can be employed to steer the technology and its deployment in ways that serve humanity best while cushioning the negative labor market and distributional effects to broaden the gains.
- Given the vast uncertainty about the nature, impact, and speed of developments in gen AI, governments should take an agile approach that prepares them for both business as usual and highly disruptive scenarios.
Key findings and analysis
- Gen AI can boost productivity growth and advance public service delivery.
- Gen AI raises concerns about:
- massive labor disruptions, and
- rising inequality.
- Fiscal policy can be used to:
- steer the technology and its deployment, and
- cushion negative labor market and distributional effects to broaden the gains.
- The authors emphasize the need for agility in government policy design in light of substantial uncertainty about gen AI’s nature, impact, and speed of development.
Policy recommendations
- Employ fiscal policies to influence the trajectory and deployment of gen AI so it serves broader societal objectives.
- Use fiscal measures to cushion adverse labor market and distributional effects, including through social protection systems and income support mechanisms.
- Adopt an agile policy framework that prepares for both business-as-usual and highly disruptive scenarios.
Subject areas and keywords
- Subject: Artificial intelligence, Automation, Capital income, Corporate income tax, Economic sectors, Financial crises, Labor, Labor markets, National accounts, Taxes, Technology
- Keywords: advance public service delivery, AI, Artificial intelligence, Automation, Capital income, Corporate income tax, fiscal policy, gen AI, Global, IMF Staff Discussion Note SDN2024/002, income support, job displacement, labor market, Labor markets, market power, replacement ratio, role of fiscal policies, social protection systems, tax systems, tax treatment, technological change
Content in this bundle
- Staff Discussion Note