Professor of economics Anton Korinek at the University of Virginia recommends that his students start learning a burgeoning technology predicted to revolutionize the study of economics. Generative artificial intelligence, or “genAI” for short, is that technology.
Machine learning, a subset of AI, is already used by economists to evaluate data and create economic forecasts. However, genAI is a distinct technology. It serves as the foundation for ChatGPT and similar technologies, and it has recently made incredible strides.
According to an article he produced that was accepted for publication by the Journal of Economic Literature, Korinek anticipates it will “revolutionize research.”
What is GenAI
GenAI can assist with more than simply research. In a recent publication, two economists at George Mason University demonstrated how genAI can be used to teach economics by building tests and solving specific models in the classroom.
The Federal Reserve Bank of St. Louis researchers also demonstrated in a separate study that an AI model they created “understands the request for inflation forecasts” and “provides an affordable and accurate alternative to traditional forecasts.”
According to Korinek, the most popular genAI programs include Microsoft’s New Bing, Google’s Bard, Anthropic’s Claude 2, and Meta’s LlaMA 2. By simply asking the chatbot to produce a list of ideas, any of those chatbots can assist economists in coming up with research topics. It can even assess research programs by outlining advantages and disadvantages.
GenAI excels at copyediting and polishing writing, including identifying errors, making title suggestions, and even creating content expressly for social media to advertise a paper. According to Korinek’s report, the new technology can make a researcher’s writing considerably more precise, clear, and fluid.
GenAI in Education
GenAI is not just useful for research; it may also be used in the classroom. George Mason University professors Tyler Cowen and Alex Tabarrok have demonstrated how genAI might improve teaching economics:
GenAI technologies are useful teaching tools because they can summarize literature, enhance writing, suggest concepts, and solve straightforward economic models with justifications.
GenAI in Economics
GenAI appears to be a powerful tool for economic forecasting, according to recent research:
Policy advisors at the St. Louis Fed found that PaLM’s predictions of inflation were more accurate than those produced by the Survey of Professional Forecasters. This suggests that large-language models may offer a more affordable alternative to traditional methods of inflation forecasting.
GenAI in Employment
While genAI promises to increase economic productivity and efficiency, its effects on employment are still up for debate: According to a survey by the employment website Indeed, occupations in software development, such as those for software engineers, are most vulnerable to disruption from genAI.
Despite the growth of general artificial intelligence (genAI), economists will always need a “human touch,” particularly when analyzing model results and providing context.