Broadening the Gains from Generative AI: The Role of Fiscal Policies

Author: Fernanda Brollo, Ms. Era Dabla-Norris, Mr. Ruud de Mooij, Mr. Daniel Garcia-Macia, Tibor Hanappi, Ms. Li Liu, and Anh D. M. Nguyen

Rapid advances in generative artificial intelligence (gen AI) hold immense potential to transform production processes & significantly accelerate productivity growth. This note provides analysis & guidance for policymakers as they prepare for the transformative impact of gen AI.

Volume/Issue: Volume 2024 Issue 002

Publication date: June 2024

ISBN: 9798400277177

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Topics covered in this book

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Labor , Economics- Macroeconomics , Economics / General , Artificial intelligence , AI , technological change , labor market , fiscal policy , social protection systems , tax systems , IMF Staff Discussion Note SDN2024/002 , gen AI , advance public service delivery , role of fiscal policies , replacement ratio , job displacement , income support , tax treatment , market power , Labor markets , Corporate income tax , Automation , Capital income , Global

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Summary

Generative artificial intelligence (gen AI) holds immense potential to boost productivity growth and advance public service delivery, but it also raises profound concerns about massive labor disruptions and rising inequality. This note discusses how fiscal policies can be employed to steer the technology and its deployment in ways that serve humanity best while cushioning the negative labor market and distributional effects to broaden the gains. Given the vast uncertainty about the nature, impact, and speed of developments in gen AI, governments should take an agile approach that prepares them for both business as usual and highly disruptive scenarios.