AI and its labor market effects in the knowledge economy

In this episode, we discuss a new theoretical framework for understanding how AI integrates into the economy. Using the paper Artificial Intelligence and the Knowledge Economy (Ide & Talamas, JPE), we debate whether AI will function as a worker, a manager, or an expert — and how each role affects inequality, organizational design, and macroeconomic dynamics.

We explore predictions about the rise of “AI agent managers,” wage polarization, and the limits of stylized theory models. Along the way, we contrast the paper with alternative approaches, critique assumptions (like infinite equally valuable problems), and consider implications for small businesses, entrepreneurs, and knowledge workers.

Timestamps

* [00:00] Worker, Manager, or Expert?

* [00:06] Who manages the AI agents?

* [00:15] Will AI worsen inequality?

* [00:25] The Ide & Talamas model explained

* [00:40] Limitations and critiques

* [00:55] Posteriors: updated beliefs

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