# Could Advanced AI Drive Explosive Economic Growth?

Tom Davidson from Open Philanthropy released [a post](https://www.openphilanthropy.org/could-advanced-ai-drive-explosive-economic-growth) recently talking about economic growth and AI. I was somewhat surprised to see that no one had yet made a linkpost on Lesswrong yet, so that's what this is. Here's [the linkpost](https://forum.effectivealtruism.org/posts/LBFhfooCQhB6SJ9AD/report-on-whether-ai-could-drive-explosive-economic-growth) on the Effective Altruism Forum.

> This report evaluates the likelihood of ‘explosive growth’, meaning > 30% annual growth of gross world product (GWP), occurring by 2100. Although frontier GDP/capita growth has been constant for 150 years, over the last 10,000 years GWP growth has accelerated significantly. Endogenous growth theory, together with the empirical fact of the demographic transition, can explain both trends. Labor, capital and technology were accumulable over the last 10,000 years, meaning that their stocks all increased as a result of rising output. Increasing returns to these accumulable factors accelerated GWP growth. But in the late 19th century, the demographic transition broke the causal link from output to the quantity of labor. There were not increasing returns to capital and technology alone and so growth did not accelerate; instead frontier economies settled into an equilibrium growth path defined by a balance between a growing number of researchers and diminishing returns to research.
> 
> This theory implies that explosive growth could occur by 2100. If automation proceeded sufficiently rapidly (e.g. due to progress in AI) there *would* be increasing returns to capital and technology alone. I assess this theory and consider counter-arguments stemming from alternative theories; expert opinion; the fact that 30% annual growth is wholly unprecedented; evidence of diminishing returns to R&D; the possibility that a few non-automated tasks bottleneck growth; and others. Ultimately, I find that explosive growth by 2100 is plausible but far from certain.

Rohin Shah has also written a summary, which you can read [here](https://www.lesswrong.com/posts/9AcEy2zThvceT9kve/an-154-what-economic-growth-theory-has-to-say-about).

Overall I was surprised by some parts of the report, and intrigued by other parts.

Despite arguing for the possibility of explosive growth, Tom seems more skeptical of the thesis than most people at Open Philanthropy, writing,

> my colleague [Ajeya Cotra’s](https://www.openphilanthropy.org/about/team/ajeya-cotra) [draft](https://www.alignmentforum.org/posts/KrJfoZzpSDpnrv9va/draft-report-on-ai-timelines) [report](https://www.alignmentforum.org/posts/KrJfoZzpSDpnrv9va/draft-report-on-ai-timelines) estimates when we’ll develop human-level AI; she finds we’re 80% likely to do so by 2100. In a [previous report](https://www.openphilanthropy.org/blog/report-semi-informative-priors) I took a different approach to the question, drawing on analogies between developing human-level AI and various historical technological developments. My central estimate was that there’s a ~20% probability of developing human-level AI by 2100. These probabilities are consistent with the predictions of AI practitioners. 
> 
> Overall, I place at least 10% probability on advanced AI driving explosive growth this century.

He may also be deferring somewhat to background priors, like our ignorance about the fundamental determinants of the growth process, and the fact that the economics experts are [very skeptical](https://www.openphilanthropy.org/could-advanced-ai-drive-explosive-economic-growth#ExpertOpinion) of transformative growth by 2100.

In [one section](https://www.openphilanthropy.org/could-advanced-ai-drive-explosive-economic-growth#General_objections_to_explosive_growth), Tom addresses an objection which roughly says that, if AI is going to lead to explosive growth later this century, we should already see signs of explosive growth in our current economy. The reason is that AI will likely accelerate some parts of our economy first, before it accelerates the whole thing. However, since no sector of our economy is growing at transformative rates, we shouldn't expect transformative growth any time soon.

In response, Tom says that this objection is plausible, but thinks that it mostly gives us reason to think that transformative growth will not happen by 2050, leaving the possibility of a longer timeline on the table. He cites [Nordhaus (2021)](https://www.aeaweb.org/articles?id=10.1257/mac.20170105&&from=f) who investigated specific economic indicators in the tech sector, and found the evidence to be somewhat lacking. 

My own opinion is that this sort of economic analysis is likely very helpful for forecasting timelines; to that end, I'm interested in learning about what economic indicators might be most helpful for timing AI development. 

My current understanding is that the primary ingredient in explosive AI-driven growth models is the lack of diminishing returns to computer capital, in contrast to other forms of capital. We could probably start to see signs of entering that regime if new companies could grow rapidly as a result of merely obtaining lots of computing resources. Therefore, it would be useful to see if we could detect these sorts of returns in the future, as a way of giving us a heads-up about what's to come.