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Suppose that companies announce a new Artifcial intelligence (AI) in the production of goods,
which will be fully operational and available in a few years. This can be modelled as z unchanged,
z' increases. Use the real intertemporal model to show graphically what happens to output,
employment, real wages and the real interest rate. Also, infer what happens to investment and
consumption.

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Suppose that companies announce a new Artifcial intelligence.pdf

  • 1. Suppose that companies announce a new Artifcial intelligence (AI) in the production of goods, which will be fully operational and available in a few years. This can be modelled as z unchanged, z' increases. Use the real intertemporal model to show graphically what happens to output, employment, real wages and the real interest rate. Also, infer what happens to investment and consumption.