Lessons from ChatGPT for Economic Growth

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ChatGPT is a revolutionary artificial intelligence chatbot that has been gaining popularity for its impressive capabilities. It is a deep neural network trained to predict the next word in a text – a huge leap from auto-complete functions like Google Search. Such sophistication surprisingly surprised the creators, giving them new insight into the power of complex AI algorithms. This provides an important lesson for economic development, which has huge implications for those who wish to improve the prospects of countries, especially in the developing world.

For many years, deep neural networks (DNNs) have been used to drive advancements in computer vision, translation, and speech recognition. Cognitive chatbots like ChatGPT continue this trend. There are two ways to train artificial intelligence algorithms: supervised and unsupervised learning. Supervised requires human input for human-labeled pictures, while unsupervised does not. ChatGPT trains its algorithm by simply predicting the next word of the text that is used to train it, creating surprisingly sophisticated results.

Policymakers may benefit from viewing economic development in the same light, by focusing on a mundane task that will nonetheless require a deep understanding of complicated development challenges. Classical development economics approach divides between proximate causes and deeper determinants of growth, but this deviation is analogous to predicting the meaning of the entire book instead of the next word. However, the result of the past four decades of development economics shows that the gap between developing and developed countries has not been bridged despite progress in education, urbanisation, and health.

The countries that have managed to catch up, however, have been successful in increasing their exports while diversifying them with complex goods and services. This entails adopting and adapting better technologies and reducing inefficiencies and costs by boosting productivity and training workers.

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ChatGPT’s approach model gives hope in such matters, by displaying the importance of focusing on one seemingly small task that has greater implications for overall economic growth. Policymakers can take the same approach, by dubbing their sole focus as “facilitating the next export,” and work to improve competitiveness and complexity. This strategy, although seemingly simple, is likely to pave the way for surprising results.

The creator of ChatGPT is Oded Galor, a professor of economics at Brown University. He is best known for his research on the origins of economic growth and his theories of demographic and technological transformations. He has received the 2016 Sun Yefang Prize in Economic Science, among other accolades.

ChatGPT offers tech enthusiasts, economists, and policymakers alike a valuable lesson on how to approach the complexities of economic development. By focusing on a seemingly mundane task, it is possible to master the intricacies of boosting export, while improving competitiveness and complexity as well. In this way, progress may be made towards bridging the gap between developed and developing countries, and finally, achieving global prosperity.

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