Fundamentally I don’t understand how a new technology can claim to make everything more efficient but at the same time grow the economy. Shouldn’t we have loss of jobs and reduction in consumption and GDP if we become way more efficient?
I guess an important assumption here is that people get payed according to productivity. Otherwise this would go into the profit of the company. But still the increase in wealth would end up somewhere.
AI -> lower cost of goods -> real GDP rises
AI -> unemployment -> lower salaries -> lower nominal GDP -> workers reposition into new jobs
Somehow the USA has the lowest unemployment ever after the industrial revolution destroyed millions of jobs... how did that happen?
It's obvious from history that as real GDP per capita rises, new professions emerge or become more accessible such that displaced workers can find new jobs. Perhaps higher real GDP enables more creative professions, or more consumption of housekeeping/helper type roles.
source: former management consultant