Here is a fascinating paper examining the impact that future assumptions about Artificial General Intelligence (AGI) (or "Transformative AI (TAI)” as outlined in the paper) becoming real will have on people’s behavior today.
The main takeaway: Just the belief that transformative AI is coming could push interest rates much higher, even before the technology actually exists. This, in turn, could affect how central banks manage the economy and overall financial stability.
The train of thought works like this:
1. The key idea is that when advanced AI arrives, it will replace human workers, and the money that used to go to workers will instead go to people who own AI systems
2. The more wealth you have when AI arrives, the more control you'll have over AI systems and their earnings
3. The researchers used economic models based on current predictions about when this powerful AI might arrive
4. They found that even moderate predictions about this future scenario are causing some interesting effects today:
- Interest rates could rise much higher (to 10-16%) compared to normal rates (around 3%)
- People are willing to accept lower returns on investments now because they're focused on building wealth to control future AI systems.
