Artificial Intelligence Can Promote Economic Growth, Write CASS and Renmin University Scholars
Title: Artificial intelligence, aging and economic growth (人工智能, 老龄化与经济增长)
Journal: Economic Research (经济研究)
Authors: Chen Yanbing, Renmin University (陈彦斌); Chen Xiaoling, Chinese Academy of Social Sciences (陈小亮); Lin Chen, Renmin University (林晨)
Publication: July 2019
The authors write China’s annual economic growth rate will slow to 4.7 percent by 2035 as China’s aging population transitions out of the workforce. China may adopt policies such as delaying the retirement age, adjusting the birth policy, and reforming the household registration system (which affects internal migration patterns) to address this. These policies should be coupled with investments in AI to stimulate economic growth.
AI is an attractive tool to promote growth in view of a shrinking workforce, they write. It can automate production, reduce dependency on human labor (especially low-skilled labor), and has high rates of total factor productivity and return on capital investment.
Using models that forecast the effect of AI on increasing labor productivity in 10 developed economies, the authors expect that China would see labor productivity rates increase 10-30 percent by 2035. This would result in 5.65 - 7.38 percent annual economic growth rates by 2035. These forecasts depend on external factors holding constant, such as China’s ability to continue to obtain microprocessors and semiconductors, which it presently imports.
Note: Chen Yanbin is Assistant Dean of Economics at Renmin University. Chen Xiaoling is affiliated with the government-affiliated China Academy of Social Sciences (CASS). This was one of the most downloaded articles in July 2019 in the social sciences field. CASS publishes Economic Research.