A top IMF official warned of the risk of “substantial distortions in labor markets” from generative artificial intelligence, while calling on policymakers to quickly enact rules to control the new technology.
In an interview with the Financial Times, the fund’s second-in-command, Gita Gopinath, said AI breakthroughs, especially those based on large-scale models like ChatGPT, could boost productivity and economic output, but warned that the risks are “very high.” goods.
“There is huge uncertainty, but that . . . does not mean that we have the luxury of waiting and thinking about the policies we will pursue in the future,” said Gopinath, IMF chief deputy director.
She added: “We need governments, we need institutions and we need policymakers to act quickly on all fronts, in terms of regulation, but also in terms of preparing for likely substantial disruptions in labor markets”.
Gopinath’s comments on AI, her most comprehensive to date, follow a string of warnings about the new technology’s potential to lead to social unrest if workers lose their jobs en masse.
Gopinath said automation in manufacturing served as a cautionary tale in recent decades after economists incorrectly predicted that large numbers of workers laid off from auto production lines would find better opportunities in other industries.
“The lesson we learned is that it was a very bad assumption to make,” she said. “It was important for countries to actually make sure that the people . . . those left behind were actually matched with productive work.”
The failure to do so had contributed to the “backlash against globalization” following the major financial crisis, Gopinath added.
To prevent history from repeating itself, governments must strengthen “social safety nets” for affected workers while promoting tax policies that do not reward companies for replacing workers with machines.
Meanwhile, she warned policymakers to be vigilant in case some companies emerge with an unassailable foothold in the new technology. “You don’t want to have super-sized companies with huge amounts of data and computing power that have an unfair advantage,” said Gopinath, also citing privacy concerns and AI-fueled discrimination.
The EU has already proposed new legislation to regulate AI, which it said was an “encouraging start” as the Biden administration is preparing regulatory plans.
The push for coordinated global action comes amid new evidence that generative AI, once more widely adopted, could be hugely transformative.
In a speech delivered later Monday, Gopinath cited numerous studies that have attempted to quantify the economic impact, including a Goldman Sachs report that an estimated 300 million jobs could be automated, leading to increased productivity and a 7 percent increase in global production over a decade. .
“AI could be as disruptive as the industrial revolution was in Adam Smith’s day,” she told an audience in Scotland at an event in memory of the economist.
Gopinath said new technologies like ChatGPT had “broad appeal” and should be taken more seriously than other developments like self-driving cars that had been heralded as game changers.
“Usually when you see a technology behaving like a general purpose technology. . . that’s when we think it could have a broad impact on the economy,” she said.