TY - JOUR AU - Korinek, Anton AU - Stiglitz, Joseph E TI - Artificial Intelligence and Its Implications for Income Distribution and Unemployment JF - National Bureau of Economic Research Working Paper Series VL - No. 24174 PY - 2017 Y2 - December 2017 DO - 10.3386/w24174 UR - http://www.nber.org/papers/w24174 L1 - http://www.nber.org/papers/w24174.pdf N1 - Author contact info: Anton Korinek Department of Economics University of Virginia Monroe Hall 246 248 McCormick Rd Charlottesville, VA 22904 E-Mail: anton@korinek.com Joseph E. Stiglitz Uris Hall, Columbia University 3022 Broadway, Room 212 New York, NY 10027 Tel: 212/854-0671 Fax: 212/662-8474 E-Mail: jes322@columbia.edu M1 - published as Anton Korinek, Joseph E. Stiglitz. "Artificial Intelligence and Its Implications for Income Distribution and Unemployment," in Ajay Agrawal, Joshua Gans, and Avi Goldfarb, editors, "The Economics of Artificial Intelligence: An Agenda" University of Chicago Press (2019) M3 - presented at "Economics of Artificial Intelligence", September 13-14, 2017 AB - Inequality is one of the main challenges posed by the proliferation of artificial intelligence (AI) and other forms of worker-replacing technological progress. This paper provides a taxonomy of the associated economic issues: First, we discuss the general conditions under which new technologies such as AI may lead to a Pareto improvement. Secondly, we delineate the two main channels through which inequality is affected – the surplus arising to innovators and redistributions arising from factor price changes. Third, we provide several simple economic models to describe how policy can counter these effects, even in the case of a “singularity” where machines come to dominate human labor. Under plausible conditions, non-distortionary taxation can be levied to compensate those who otherwise might lose. Fourth, we describe the two main channels through which technological progress may lead to technological unemployment – via efficiency wage effects and as a transitional phenomenon. Lastly, we speculate on how technologies to create super-human levels of intelligence may affect inequality and on how to save humanity from the Malthusian destiny that may ensue. ER -