Weighting/Value: 15%

Instructions

Weighting/Value: 15%

Word limit: Must not exceed 1,500 wordsSubmission details: On-Line submission via Moodle Submission.

Academic integrity:

To reduce the similarity,

First and foremost, complete your assignment by yourself and independently.

Secondly, you should NOT repeat the questions in your assignment tasks. Please be noted, this assignment is not a Q&A, but an essay - so please embed these questions in your essay.

Thirdly, you may put all references in a separate document to be uploaded separately along with your main text.

Fourthly, make sure to upload your assignment coversheet separately along with your main text.

Plagiarism is strictly prohibited. You should familiarise yourself with what is plagiarism and university guidelines on plagiarism available here.

Condition for use of generative AI: Generative AI tools are restricted for certain functions in this assessment task: In this assessment, you can use generative artificial intelligence (AI) in order to brainstorming only, but not copy/paste text. Any use of generative AI must be appropriately acknowledged (see Learn HQ).

Criteria for marking:

Coherence of argument (10 marks)

Relevance to the topic: demonstrate the collection of adequate data and figures to support your arguments (5 marks)

Logical consistency: demonstrate the understanding and appropriate use of economic rationales in the paper (5 marks)

Originality (2 marks)

Demonstrate your creativity in the use of facts to support your arguments

Presentation (2 marks)

Having a well-structured executive summary and conclusion section

Demonstrate the appropriate use of language and the style of charting in presentation

Referencing (1 mark)

Having a minimum of three (3) references (books or articles written in English from reputable publishers*), in addition to the references mentioned in this instructional paperDemonstrate appropriate use of reference style in the paper (footnotes, endnotes, and etc.)

Note: In the current context, reputable publishers include international organisations, governments, universities, and well-known commercial publishers. Citing newspaper articles is allowed but with caution in checking the sources of information.

Details of task

Technology is having profound effects on long-term economic growth. Automation and digital

advances are shifting labour demand away from routine low- to middle-level skills to

higher-level and more sophisticated analytical, technical, and managerial skills. Artificial Intelligence (AI) is reshaping the world and blurring the difference between robots and human beings in terms of thinking capacities.

Since its release in November of last year, OpenAI's ChatGPT has been used to write cover letters, create a children's book, and even help students cheat on their essays.

However, more than 1,000 technology leaders and researchers, including Elon Musk, have urged artificial intelligence labs to pause development of the most advanced systems, warning in an open letter that A.I. tools present profound risks to society and humanity.

This assignment is to ask our economics students to research into the impacts of technological advances on long term economic growth, in particular, jobs, skills, and wages.

You may start with a class economics paper by Richard Ball on the impact of technology on economic growth to get some economics backgrounds on this topic. The 2016 Economist paper is to address this issue in the context of IT revolution. The McKinsey report updates the context by examining the impacts of AI and machine learning. The more recent article by the Noble-prize winner Paul Krugman discussed the impacts of ChatGPT on skilled jobsRead the articles

Richard E. Ball (1957), The Impact of Technology on Economic Growth, The American Journal of Economics and Sociology, 1957, Vol. 16, No. 3 pp. 281-290

Economist (2016), The return of the machinery question

McKinsey & Company (2018), How will automation affect jobs, skills, and wages?

Paul Krugman (2022), Does ChatGPT Mean Robots Are Coming For the Skilled Jobs? The New York Times, Dec 6, 2022.

Write an essay to address the following issues/questions (this is not a comprehensive list and please feel free to add any issue you want to investigate):

Within the macroeconomic context, explain the mechanism in which technological advances impact the long-term economic growth.

What is the machinery question? Whether the current advances in AI (such as ChatGPT) differ from the traditional machinery question?

Do you agree that AI has the potential to replace labour forces in some professions? Use one or two real world examples to support your arguments.

Why did Elon Musk, one of the original investors of OpenAI and the CEO of Tesla (which is an AI-intensive manufactory) argue that A.I. tools present profound risks to society and humanity.?

How will your own profession be affected by the advances in AI? (Im doing masters in banking and finance)

From your reading, highlight some policy recommendations to alleviate the negative impacts of AI on jobs, skills, and wages.

Critically evaluate these policy recommendations.

My work:

Technology is regarded as an important factor of economic growth. The rapid rate of economic growth can be achieved through high level of technological advancement (Solow, 1957). According to Schumpeter, an Austrian political economist, technological advancement or innovation is the key factor that determine economic growth. Kindleberger stated that the main aspect that lead to the increase in productivity is due to technological advancement. Solow also estimated that two third of growth of US economy is due to technological advancement. According to the neo classical theory, advancement in technology leads to an increase in capita per person which then encourage savings and investment and results in increase in the real GDP. Schumpeter is the first economist who supported that technology will have a positive impact towards the economy.

According to the growth principle in neo-classical theory, technological transformation causes an increase in the capita per person and motivates savings and investments and as a result, causes an increase to real GDP. If technological transformation ceases, the growth will also stop. Schumpeter is known as the first economist to defend that technological development will make positive impacts to the economic growth. The conceptual framework of Schumpeter brings forth an evolutionary process developing with the creative destruction of the weakening sectors and involving the development of new technologies and new industries in economy. This process is correlated with the technological advances defined as economic growth and structural changes.

Goldman Sachs Predicts 300 Million Jobs Will Be Lost Or Degraded By Artificial Intelligence

The machinery question was first developed my economist David Ricardo in 1821 which questions the impact of machinery on the interest of different class of society mainly the labour class and their perception that the use of machinery can be harmful to their interest. During the industrial revolution, most of the workers were against machines and steam engines that it would destroy their livelihood. In 1930 John Maynard Keynes introduced a word called technological unemployment where less people were required to complete a job and automation was replacing people. But David Autor, an economist at the

Massachusetts Institute of Technology states that machine creates more jobs than it destroys. Automation has made work cheaper and quicker and increased demand for labour where automation hasnt reached. In America during 19th century, due to automation, labours required per yard of cloth fell by 98 percent which lead to an increase in production of clothes at cheaper price and lower price led to increase in demand for clothes which further increased jobs for weavers by quadrupled. Therefore, with the advancement of technology, it may take some jobs but creates more jobs that may require a different skill.

Today, with the advancement of Artificial Intelligence is a technology that can do jobs that could be only done by humans before. According to a study by Carl Benedikt Frey and Michael Osborne of Oxford University stated that 47% of jobs in America could be substituted by computers and were at high risk.

AI will not cause mass unemployment, but it will speed up the existing trend of computer-related automation, disrupting labour markets just as technological change has done before, and requiring workers to learn new skills more quickly than in the past.

Others fear thatAI poses an existential threat to humanity,

because superintelligent computers might not share mankinds

goals and could turn on their creators. Such concerns have

been expressed, among others, by Stephen Hawking, a physicist,

and more surprisinglybyElon Musk, a billionaire technology entrepreneurwhofounded SpaceX, a rocket company, and Tesla, a

maker of electric cars. Echoing Carlyle, Mr Musk warns thatwith artificial intelligence, were summoning the demon. His

Tesla cars use the latest AI technology to drive themselves, but

MrMuskfrets about a future AI overlord becoming too powerfulfor humans to control. Its fine if youve gotMarcus Aurelius as

the emperor, but not so good if you have Caligula, he says.

Im currently studying masters of banking and finance.

Some of the at risk jobs according to report by Goldman Sachs are:

You can always misuse technology inorder to create harm but there can be regulatory measure which could increase transparency.

How ai has helped in economic growth in 100 years?

Please note: students must write an essay to address these questions in a coherent way, rather than a Q&A style writing.