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jonny@neuromatch.social ("jonny (nonvenomous)") wrote:

This assumption rules:

In this case [of automation] we assume that AI raises capital’s productivity to the point where
capital, rented at the no-AI rate supplies the instance at unit cost that is, π‘Ž_{i,t} log points below labor’s unit cost without AI, where bars mark the no-AI path.

So like, automation is always possible and we fix the cost of it so it is always cheaper because ai is magic and makes the capital pricing term disappear.

Performing a task instance with AI takes one of two forms. Under augmentation, AI is assumed to raise a worker’s labor productivity 𝛼𝐿,𝑖 ,𝑑 on that instance by π‘Žπ‘– ,𝑑 log points. Under automation, an AI system performs the instance outright, so that the instance is performed by capital. In this case we assume that AI raises capital’s productivity 𝛼𝐾 ,𝑖 ,𝑑 to the point where capital, rented at the no-AI rate Β―π‘Ÿ , supplies the instance at unit cost Β―π‘Ÿ /𝛼𝐾 ,𝑖 ,𝑑 = 𝑒 βˆ’π‘Žπ‘– ,𝑑 ¯𝑀𝑑 /( ¯𝐴𝑑 𝛼𝐿,𝑖 ), that is, π‘Žπ‘– ,𝑑 log points below labor’s unit cost without AI, where bars mark the no-AI path. In either form, the unit cost of the instance falls by π‘Žπ‘– ,𝑑 at no-AI factor prices