Who are economists?
For the long read, I recommend “Economics for the Common Good” by Nobel Prize winner Jean Tirole.
In short, economists explain economic motives, behavior, and policy by investigating the effects of independent variables on dependent ones. They adhere to transparency, honesty, and independence to present the bigger picture and achieve common long-term goals.
Economists are not business analysts, who are corporate-dependent and provide short-term nudges to decision-makers.
Economists are not data scientists, who use tools (including AI) to predict business case scenarios in the mid term.
How is AI transforming economists?
For economists, as for everyone, AI is an assistant for collecting data, references, and formulas – handling repetitive tasks and thus freeing time for the formulation of ideas and theories.
- Tools:
Economists use AI for big data processing to test hypotheses. In my experience, supporting a theory requires sufficient data; big data merely proves it twice. Whatever is observed in the sample of 50-100 cases appears to hold for 1 million cases. In this sense, AI makes economists more persuasive and shining.
Economists use AI to see what is unseen to the human eye. For example, NLP and text analysis, which I can refer to “Narrative Economy” by another Nobel Prize winner Robert J. Shiller. The central bank can use AI to manage inflation expectations through narratives on social media.
Economists use AI to make predictions, crossing the fields of business analytics and data science. AI makes economists more business-oriented, case-focused, and practical in government services.
- Limits:
Economists can’t open the black box of AI. It limits methodological transparency and can’t prove the reliability of its results.
Economists can’t validate the data used for AI. It limits the data source and the interpretation of predictions.
Economists can’t take responsibility for the implications of AI predictions. Even if they rhyme with economic logic, some can’t be checked with other methods.
- Risks:
Economists can lose their professional focus. AI can replace the research process and transform economists into bloggers who are “competent” at commenting on everyday news.
Economists can select inappropriate control variables and offer misleading explanations with unpredictable policy implications. To avoid that, AI can transform economists into “yes, sir” servants for politicians, using AI-popular rather than science-proven explanations.
Economists can become dependent on the national AI model. In this sense, AI will transform economists with an international vision and universal explanations into politically correct and culturally sensitive orators.
Can’t conclude whether AI transforms economists for better or worse, but it’s definitely different with its new pros and cons.
