Lina Kramer

Thesis title:

Public Policy in an AI Economy


From technophobia to enthusiastic predictions, artificial intelligence (AI) is receiving increasing media, economic, political, and academic attention. The renewed interest is the result of a substantial increase in computing power and the availability of data which enabled a breakthrough in developing artificially intelligent technology. These new AI-powered applications have the potential to transform many aspects of modern life.

While in the past technological progress has been a driver of prosperity it has also been a major force of disruption. AI-driven automation is feared to increase economic inequality in the twenty-first century. Much of the public debate is about the structural impact of AI-driven automation on the labour market and resulting distributional consequences: How can be ensured that AI-driven automation of work benefits many instead of a few? How should social policy respond to the impact of AI on the income distribution? Should AI be taxed?

The objective of this doctoral research project is to model the optimal tax-benefit system in a world in which AI-powered technologies substitute and complement human intelligence. Whether AI should be taxed or even subsidized will depend on the impact AI technologies have on wages across occupation types, the effect of changing wages on labour supply decisions, and the government’s preferences to redistribute along the wage distribution. The model builds the foundation for a quantitative analysis of different economies. Considering recent technological advances and the rapid diffusion of AI, results are of high interest for scholars and policymakers.

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First supervisor:

Matakos Konstantinos


13- Politics, Public Policy & Governance