## Embracing Artificial Intelligence by Joshua Gans

## Source details

**Canonical URL:** [Embracing Artificial Intelligence by Joshua Gans](https://www.imf.org/en/publications/fandd/issues/2023/09/cafe-econ-embracing-artificial-intelligence-joshua-gans)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2023/09/cafe-econ-embracing-artificial-intelligence-joshua-gans/index.md)
- [Structured JSON version](/en/publications/fandd/issues/2023/09/cafe-econ-embracing-artificial-intelligence-joshua-gans/index.json)
- [Bundle manifest](/en/publications/fandd/issues/2023/09/cafe-econ-embracing-artificial-intelligence-joshua-gans/bundle-manifest.json)

## Bibliographic details
- Authors: Marjorie Henriquez
- Published: September 1, 2023

---

### Overview
- Interview format: conversation between Joshua Gans and Marjorie Henriquez for F&D Magazine.
- Publication date: September 2023.
- Core argument: Assessing the power and pitfalls of AI requires putting it in the hands of people to learn its benefits and adverse consequences.

### How this wave of AI differs from prior automation
- Key distinction:
  - Previous automation focused on predominantly physical tasks; AI provides the potential to automate cognitive tasks.
  - Past automation of physical tasks also included cognitive expression of intent; information technology automated computational cognitive processes.
- Unique AI capability:
  - Ability to interact in variable and non-standardized environments (for example, handling random objects not in particular locations), requiring a sense of the environment.
- Implication:
  - AI extends automation into more varied contexts than earlier technologies.

### Expected impacts over the next five years
- Observed effects where AI is deployed in workplace tasks:
  - Tools often enable people with lower skills and less experience to perform at the level of those with higher skills and more experience.
  - Example: demand prediction tools in Tokyo allowed less experienced taxi drivers to waste less time finding riders, with little productivity improvement for experienced drivers.
- Projected outcomes (next five years):
  - Skill premia in certain occupations will be reduced.
  - Employment opportunities will open up for a wider set of people.
  - Likely effects: increase productivity, raise employment, and lower income inequality—at least at certain ranges of the income distribution.
- Longer-term forecast: Beyond the next five years, outcomes are harder to predict.

### Overhyped and overlooked aspects
- Rapid improvements in generative AI (LLMs such as ChatGPT or Bard, generative art, coding boosts) have led to extrapolations that people will be quickly replaced in affected tasks.
- Gans’ assessment:
  - Much of the public angst is overhyped and is vague speculation rather than evidence-based.
  - Productivity improvements from AI are real and noticeable.
  - Policy stance: “letting it rip” is the right policy for the current moment to capture productivity gains and to learn about adverse consequences.
- Cautionary note:
  - Rapid adoption necessitates active monitoring for adverse consequences, identifying causes, and experimenting with policy interventions to mitigate harms.

### Implications for international organizations and policy recommendations
- For organizations like the IMF:
  - Standard playbook applies: AI should be as competitively provided as possible and available as widely as possible (through trade) so it can be deployed wherever it increases productivity.
  - Mission alignment: similar to programs encouraging information technology and internet access.
- On regulation and ethical guidance:
  - Identifying a single authoritative regulator is difficult because ethical issues are far from clear.
  - Some discrimination issues may be easier to remediate in AI (“AI will be easier to reprogram to be less discriminatory than people are”).
  - Conclusion: AI requires strong policy guidance and experimentation to induce necessary changes.

*Source: Embracing Artificial Intelligence by Joshua Gans, F&D Magazine, September 2023.*

---

## Content in this bundle

- **F&D: Cafe Economics: Embracing Artificial**
  - [F&D: Cafe Economics: Embracing Artificial (Markdown version)](/-/media/files/publications/fandd/article/2023/september/cafe-economics-joshua-gans.pdf.md){rel="alternate" type="text/markdown"}
  - [F&D: Cafe Economics: Embracing Artificial (PDF)](/-/media/files/publications/fandd/article/2023/september/cafe-economics-joshua-gans.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/fandd/issues/2023/09/cafe-econ-embracing-artificial-intelligence-joshua-gans_