An Introduction to AI and Economics

So far, the adoption rate of methods of artificial intelligence and machine learning (AI/ML) has been quite uneven across the economics profession. The uptake of these methods has been heavily concentrated in microeconomics where an explosion of data collection, particularly at the level of individual consumers (think of a firm like Amazon) has made the benefits of AI/ML especially clear and possible given that these models require massive amounts of data to be useful. Yet what are the prospects for applying the tools of AI to macroeconomics – that branch of economics that looks at the performance of big things like whole regions, countries, or even the globe? What are the differences between traditional statistical tools that macroeconomists use and AI/ML-based approaches? This thought piece is the first of three that will walk readers (whether economists or not) through my guesses at answering some of these questions.