If you had a sudden influx of 100m high-skilled immigrants (for simplicity, just assuming this is ordinary very high-skilled immigrants, and let’s say they don’t have above-replacement fertility), the long-run growth rate wouldn’t actually change much. Besides the “declining research productivity” issue common to semi-endogenous models, I’d guess this would also be pretty bottlenecked by energy, housing/zoning laws, etc. A population level effect, which doesn’t substantially change the population growth rate, seems really unlikely to me to produce significantly accelerated growth for longer than 10-20 years. I’d expect, setting aside institutional issues like political backlash, the per-capita GDP growth rate to look something like: (i) For the first 2-5 years, absorption costs bottleneck growth heavily, so growth bumps up to ~2.5-4% a year but not more. (ii) After that, you get a ~10-20 year period of elevated growth, say 4-6% a year in per capita terms. (iii) Eventually, growth gradually moves back down to ~2% a year, gradually slowing down year after year. (iv) After the arriving cohort retires, growth falls below trend for around ~a decade. (v) Finally, growth returns to the ~1.8-2% long-run trend.
AI could in principle be much more transformative than this, because the initial “level effect” would trigger a further increase in the number of “digital workers,” in turn causing another productivity boost which once more is reinvested in creating even more digital workers, and so on. (This is assuming other bottlenecks don’t bind. I think it’s pretty plausible they don’t end up stopping the substantial growth boost, to be honest! My current best guess is that AGI, in many reasonable operationalizations of the term, would in fact cause explosive economic growth.)
It seems to me that:
If you had a sudden influx of 100m high-skilled immigrants (for simplicity, just assuming this is ordinary very high-skilled immigrants, and let’s say they don’t have above-replacement fertility), the long-run growth rate wouldn’t actually change much. Besides the “declining research productivity” issue common to semi-endogenous models, I’d guess this would also be pretty bottlenecked by energy, housing/zoning laws, etc. A population level effect, which doesn’t substantially change the population growth rate, seems really unlikely to me to produce significantly accelerated growth for longer than 10-20 years. I’d expect, setting aside institutional issues like political backlash, the per-capita GDP growth rate to look something like: (i) For the first 2-5 years, absorption costs bottleneck growth heavily, so growth bumps up to ~2.5-4% a year but not more. (ii) After that, you get a ~10-20 year period of elevated growth, say 4-6% a year in per capita terms. (iii) Eventually, growth gradually moves back down to ~2% a year, gradually slowing down year after year. (iv) After the arriving cohort retires, growth falls below trend for around ~a decade. (v) Finally, growth returns to the ~1.8-2% long-run trend.
AI could in principle be much more transformative than this, because the initial “level effect” would trigger a further increase in the number of “digital workers,” in turn causing another productivity boost which once more is reinvested in creating even more digital workers, and so on. (This is assuming other bottlenecks don’t bind. I think it’s pretty plausible they don’t end up stopping the substantial growth boost, to be honest! My current best guess is that AGI, in many reasonable operationalizations of the term, would in fact cause explosive economic growth.)