2020
DOI: 10.5089/9781513556505.001
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Will the AI Revolution Cause a Great Divergence?

Abstract: This paper considers the implications for developing countries of a new wave of technological change that substitutes pervasively for labor. It makes simple and plausible assumptions: the AI revolution can be modeled as an increase in productivity of a distinct type of capital that substitutes closely with labor; and the only fundamental difference between the advanced and developing country is the level of TFP. This set-up is minimalist, but the resulting conclusions are powerful: improvements in the producti… Show more

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Cited by 17 publications
(12 citation statements)
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“…These obstructions have often been the result of employees' unwillingness to accept and use these new technologies, given the fact that AI has the potential to replace the work that is currently being realized by a large number of workers (Burgess, 2017). This is especially true in the case of companies which operate in developing countries where many observers argue that the current wave of automation will have significant effects (Alonso et al, 2020). Sachs (2019) and Yusuf (2017) suggest profound implications for development pathways and strategies, along with reductions in demand for unskilled labor within these countries.…”
Section: Introductionmentioning
confidence: 99%
“…These obstructions have often been the result of employees' unwillingness to accept and use these new technologies, given the fact that AI has the potential to replace the work that is currently being realized by a large number of workers (Burgess, 2017). This is especially true in the case of companies which operate in developing countries where many observers argue that the current wave of automation will have significant effects (Alonso et al, 2020). Sachs (2019) and Yusuf (2017) suggest profound implications for development pathways and strategies, along with reductions in demand for unskilled labor within these countries.…”
Section: Introductionmentioning
confidence: 99%
“…Labor-saving progress may not only create winners and losers within the affected developing countries, but it may make entire countries on net worse off. Alonso et al (2020) find that improvements in the productivity of "robots" could drive divergence, as advanced countries benefit from computerization more given their higher initial capital stock.…”
Section: A Labor-saving Technological Progressmentioning
confidence: 99%
“…create winners and losers within the affected developing countries, but it may make entire countries on net worse off. Alonso et al (2020) find that improvements in the productivity of "robots" could drive divergence, as advanced countries benefit from computerization more given their higher initial capital stock.…”
Section: A Labor-saving Technological Progressmentioning
confidence: 99%