GenAI: Transforming Economics as We Know It


Anton Korinek, an economics professor at the University of Virginia,

is advising his students to master a rapidly evolving technology with the potential to revolutionize economics—generative artificial intelligence, or "genAI" for short.

While economists already use machine learning, a subset of AI, to analyze data and create economic forecasts, genAI represents a distinct technology.

Powering tools like ChatGPT, it has seen rapid advancement in recent months.

Korinek is confident that genAI will "revolutionize research," as stated in a paper he authored, soon to be published in the Journal of Economic Literature.

According to him, it's a powerful tool capable of solving complex economic challenges more effectively and productively.

GenAI's applications go beyond research.

Recent studies by economists at George Mason University have demonstrated its usefulness in teaching economics, including solving specific models in the classroom and crafting exams.

Moreover, researchers at the Federal Reserve Bank of St. Louis have developed an AI model that "understands the request for inflation forecasts" and offers a cost-effective and precise alternative to traditional forecasting methods.

aCurrently, genAI seems more likely to empower economists rather than replace them.