Nobel Laureates Warn AI Won't Spark Rapid Economic Growth or Major Job Automation
Despite widespread enthusiasm in Silicon Valley and on Wall Street about artificial intelligence as the next engine of global economic growth, leading economists offer a more cautious and even pessimistic outlook. Christopher Pissarides, Nobel Prize winner in Economics and a renowned labor market expert, recently warned that expectations for a return to rapid productivity growth are unrealistic. He explained that while AI may bring some improvements, it will not produce the dramatic leap seen in previous decades with the advent of computing and the internet. Pissarides highlighted a key structural limitation: a large portion of the modern economy relies on services that are difficult to automate. He noted that up to 40% of jobs in countries like the US and UK, including nursing, hospitality, and personal services, are largely unaffected by AI and thus unlikely to see significant productivity gains.
Pissarides is not alone in his cautious assessment. Another Nobel laureate, Daron Acemoglu, projects a modest AI contribution to overall productivity growth of about 0.55 percentage points over the next decade, far below the optimistic forecasts from banks and investment firms. Acemoglu also estimates that only around 5% of labor market tasks can be profitably automated in the near term. This cautious stance contrasts sharply with more optimistic market predictions, such as those from Goldman Sachs, which foresee AI potentially boosting productivity growth rates by up to 3% annually, with an average forecast of about 1.5%. Even within the financial sector, skepticism exists; Apollo’s chief economist, Torsten Slok, warned that massive AI investments have yet to yield tangible returns, risking a sharp market correction.
Beyond academic debate, this issue carries significant implications for the global economy. If AI fails to meet high expectations, it could undermine justification for huge investments in infrastructure, chips, and advanced models. Moreover, it may indicate that the very structure of the modern economy limits the potential for sharp productivity jumps, even in an era of advanced technology. In other words, while the AI revolution may be underway, the promised substantial economic growth remains uncertain and far from guaranteed.
