This paper is an interesting unified framework to measure the impact of AI.
Their result is more job losses (20m) and more disinflation.
“As firms pass productivity gains on to consumers, we project a permanent reduction in the overall price level of around seven to eight percent plus a separate ongoing demand-side drag on inflation of roughly 0.7 to 0.9 percentage points a year. This is larger than the disinflation that followed China’s integration into global trade“
One interesting insight worth thinking about is ““workflow completeness,” which estimates the share of a job’s tasks that AI can complete end to end. We combine this with Amdahl’s Law, which holds that the acceleration of any process is capped by the part that cannot be accelerated. If a fifth of a job must remain human, then however fast AI handles the remainder, the workflow can move no faster than its human component.“
“The study by researchers from Italy shows that by November 2024, more than 50% of German households were investing in stocks or stock funds, up from about 40% in the middle of 2020. Across the Eurozone, participation rates rose from about 30% to 40% in the same period.“
This is a great concept – industrial staples are mission-critical components that make factories run. Mundane, low-value things they can’t do without, like bearings, gaskets, and industrial gases.
See, for example, a chart where they slice employment by stage and exposure to AI – early career and most exposed see a marked hit post ChatGPT launch.
