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Instead, the big questions that I find interesting concern the true economic importance of AI and, assuming it is an economically important technology, the follow-on impact on society. It\u2019s more those kinds of questions that Capital Economics, a consultancy, examines in a short recent note from economist Neil Shearing, \u201CThe five questions that will determine AI\u2019s ultimate economic and market impact.\u201D

From CE: \u201CAI\u2019s detractors, including economist Robert Gordon, argue that the technology isn\u2019t impressive enough to meet the definition of a GPT and so won\u2019t deliver economy-wide transformations as the printing press and railways did in their time. But we think AI does meet most of the agreed criteria to be considered a GPT and, if we\u2019re right, then the economic and market implications are large and wide-ranging.\u201D

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If the fire happens and it was caused by your company, then you're responsible. And you know, the economics district liability are super interesting. Usually as economists, we are worried about what can happen under strict liability when companies are able to avoid some of the costs that we try to assign to them by going bankrupt. And of course, PG&E is in bankruptcy right now. And bankruptcy is potentially an important issue for fire incentives, but it's not the way that liability incentives play out that I think is most important for outages. So I think that these outages are really interesting because in some ways they're basically the mirror image of the traditional problem that environmental economists are worried about with liability. We're usually worried that the company is going to go bankrupt, and that's going to allow them to avoid having to pay for the big bad thing that they caused.

In this case, I think it's reasonable to be worried that maybe PG&E isn't fully accountable for the costs that they're creating, trying to avoid fires from happening. So that that sort of goes to the fact that PG&E is a regulated monopoly, which means they're the only company that provides electricity service in the areas where they provide service. They don't have much of a concern that their customers are going to leave them for another company, which makes them, on some level, less accountable to their customers than they would be in some kind of idealized competitive market. And that basically means, on a given day when they're thinking whether or not to provide electricity service, they might not think so much about the cost that that's going to create for the people who are losing service just because in a very narrow financial sense, that doesn't affect them as much as it would if they had to worry about angering their customers and their customers leaving them for another company. So, on the one hand we have this liability standard that forces them to internalize all the costs if something big goes wrong. On the other hand, they don't pay that much of a cost for shutting people service off. It's sort of, you know, to an economist, that gets your attention. It looks like maybe that's going to cause them to err potentially a little too much on the side of shutting people off, because why not? You know, why not try to avoid this really big liability.

Judd Boomhower: Yeah, absolutely. So hugely important question right now obviously. And in Sacramento, in California, which is the state that I live in, we have, you know, giant ongoing discussion of lots of different aspects of that problem. The thing that seems reasonable to me as an economist, is that maybe this is a setting where we should be thinking about a little more direct government regulation. That's not always something you'll hear an economist say. We tend to be a little skeptical of direct regulation, but because of all the complicated incentive problems that exist for the utility, and for other individuals here, I think it's reasonable to at least think about a model where the public utility commission, or some other government body, actually has a more direct role in deciding when public safety power shutoffs should happen and should not happen. Of course, that's not a perfect model either, in that it requires the government to have a lot of information, but it does potentially smooth over some of these other incentive problems. I'm far from making it a direct recommendation here, but just kind of looking at it from the outside, it seems like that's at least worth considering.

They're like, you know, unusual algal bloom patterns, or unusual wind swept deserts with amazing colors and, you know, blooms of flowers and deserts and things like that. And it's kind of hallucinogenic, a lot of these images. But I downloaded a bunch of them and now they're all, you know, my screensavers on all my computers along with my pictures of my kid. But yeah, these pictures are just really fantastic. So if you're anywhere near your computer, go check it out. USGS, Earth As Art, highly recommend that. But how about you, Judd? What's at the top of your stack?

1) New client-experts relations (and the Bayesian game-theoretic framework) made economists more like engineers whose role was to provide the means to fulfill given aims rather than thinking more broadly about how these ends were constructed

In your career as an economist, your focus has been on macroeconomics, and the mathematical study of complex systems. What insights has your economic work provided in the scientific field, and vice versa?

A study conducted by Kathleen Vohs from the University of Minnesota and published in Science Magazine in 2006 attempts to provide an answer to that question. Vohs and her colleagues conducted a series of experiments in which they primed their subjects to think about money. They did not skimp on their research tools: They gave their subjects tasks that involved unscrambling phrases about money, placed piles of Monopoly money nearby as if by chance, set up screensavers on computers that displayed various denominations of money. Other randomly selected subjects were used as a control group. This group was tasked with unscrambling phrases that were not about money, they were not exposed to Monopoly money, and the screensavers they saw depicted tranquil landscapes.

But how can any Stanford alum ever hope to convey the special feelings we all have from our four years at the Farm? I, for one, have given up trying, opting instead for quiet rebellion with a Stanford screensaver on my computer and a beanbag Tree on the corner of my desk. Perhaps what we need is a Red, White and Blue Club? ff782bc1db