Economic Scenarios for Transformative AI

Researchers have developed a macroeconomic framework modeling the effects of AI on GDP, wages, labor share, and unemployment between 2026 and 2030 across modest, substantial, and extreme scenarios. In an extreme scenario where AI automates nearly half of cognitive work, annual GDP growth accelerates to 15 percent, but the labor share of income drops from 60 to 45 percent and cognitive worker unemployment approaches 20 percent. This research provides faculty with a structured, quantitative foundation to analyze the economic trade-offs between rapid AI-led growth and severe labor market displacement.

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