South SFV Today

In a recent conference held by the Hoover Prosperity Program, experts discussed the U.S. economy's adaptation to the ongoing artificial intelligence (AI) boom. The conference, titled “How Should the US Economy Adapt to the AI Boom?” featured prominent speakers from Hoover Institution and Stanford University, including Jonathan Levin, Steven J. Davis, and Justin Grimmer, with Amit Seru moderating the panel.

Amit Seru began by acknowledging that AI is already influencing daily life and the economy, contributing over $400 billion as of 2024. Projections estimate this impact could reach $4.4 trillion by 2030. As productivity increases, there are growing concerns regarding job displacement, equity, and governance. The discussion focused on labor and workforce adaptation, antitrust concerns, and regulation.

Steven Davis noted AI's multifaceted impact on labor, likening it to previous technological shifts. He assured that job losses might be more evenly distributed across different sectors, which could ease economic hardships. According to Davis, AI often complements workers, enhancing productivity without necessarily eliminating jobs. However, reskilling remains essential. He advocated for a cautious approach to regulation to allow innovation while supporting workers through improved unemployment insurance and wage subsidies.

Jonathan Levin explored how AI is reforming markets and raising questions about market design and competition. AI-driven markets, such as digital advertising and ride-sharing, often exhibit a winner-takes-all dynamic, which can lead to significant market power for a few firms. Levin called for antitrust policies that accommodate these characteristics, suggesting that traditional tools may falter in such rapidly changing environments. He also stressed universities' roles in research and policy debate, suggesting greater collaborations with industry and government.

Justin Grimmer addressed AI regulation challenges, emphasizing the distinct issues posed by AI's predictive and generative capabilities. He highlighted the talent disparity between industry and regulators, which may weaken oversight. Fairness should be evaluated in comparison to current systems, he said. Grimmer also suggested the need for international AI governance frameworks, akin to treaties on nuclear weapons or climate change.

The panel highlighted that while AI offers substantial productivity and innovation prospects, it poses challenges for labor markets, competition, and governance. Effective adaptation requires collaboration across government, academia, and the private sector.

The Hoover Prosperity Program is dedicated to researching policies that promote economic prosperity through informed decision-making.