Price Responsiveness of Artificial Intelligence: Supply, Demand and the Substitution of Human Labour

Abstract

Examines when it becomes economic to replace human labour with AI systems for certain tasks. Using public data and simple economic models, the paper looks at how falling compute prices and better algorithms raise the supply of AI, what drives adoption by organisations, and where the inflection points for labour substitution lie. It notes that about 40% of global employment is exposed to AI, with large differences across income groups, and discusses the role of reskilling and policy.

Tags

• #AI
• #Economics
• #Labour Markets
• #Automation
• #Reskilling