|Author Name||YANO Makoto (President, RIETI) / FURUKAWA Yuichi (Faculty Fellow, RIETI)|
|Creation Date/NO.||February 2020 20-E-009|
|Research Project||Evidence-based Policy Study on the Law and Economics of Market Quality|
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This study is motivated by the widely-held view that self-replicating artificial intelligence may approach "some essential singularity . . . beyond which human affairs, as we know them, could not continue" (von Neumann). It investigates what state this process would lead to in an economy with frictionless markets. We demonstrate that if the production technologies, too, are frictionless, all workers will eventually be pulled into the most labor friendly sector (economic black hole). If, instead, they are subject to a friction created by congestion, it will give rise to, within a finite span of time, a state in which all workers will be unemployed (total job destruction).