The Simple Macroeconomics of AI is a 2024 working paper by Daron Acemoglu which models the economic growth effects of AI and predicts them to be small: About a .06% increase in TFP growth annually. This stands in contrast to many predictions which forecast immense impacts on economic growth from AI, including many from other academic economists. Why does Acemoglu come to such a different conclusion than his colleagues and who is right?

First, Acemoglu divides up the ways AI could affect productivity into four channels:

1. AI enables further (extensive-margin) automation.
Obvious examples of this type of automation include generative AI tools such as large language models taking over simple writing, translation and classification.

2. AI can generate new task complementarities, raising the productivity of labor in tasks it is performing.
For example, AI could provide better information to workers, directly increasing their productivity. [...]

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