Economic Report of the President draws on work of SIEPR scholars

The annual release of the Economic Report of the President presents an overview of the nation’s economic progress and key policy concerns of the White House.

This year, the 487-page report from President Biden delves into issues related to the aging population, jobs, affordable housing, international trade, artificial intelligence, and the transition to clean energy.

The 2024 report, prepared by the Council of Economic Advisers and released in March, taps the work of several SIEPR scholars and demonstrates how policy-relevant research informs government discussions and decisions. Their studies on topics ranging from labor market changes to the long-term effects of foreclosures underpin a variety of assessments in the report. And notably, in the chapter on “An Economic Framework for Understanding Artificial Intelligence,” the contributions of SIEPR scholars play a significant informative role.

The economic impact of artificial intelligence

Examples of SIEPR fellows and their work credited in the report for illuminating AI implications include:

•    Susan Athey on trade-offs between human- and AI-based decisions and the importance of guardrails in AI system designs, and on competition dynamics of the market structure of digital platforms.
•    Robert Bartlett on how algorithmic decision-making has been found to reduce discrimination in fintech lending.
•    B. Douglas Bernheim on how AI tools could make it easier for firms to collude in complex multimarket interactions.
•    Nicholas Bloom on the complicated relationship between innovation and market competition, and how policy reforms could incentivize innovation.
•    Tim Bresnahan on how general purpose technologies can lead to complementary inventions.
•    Erik Brynjolfsson on the current landscape and trends of AI;  the patterns of early AI adoption; the importance of collecting data about AI usage; how in some work environments, the use of generative AI increases productivity; how machine translation boosted international trade on an online platform; how productivity growth plays out with new general purpose technologies like AI; and how machine learning advances impacted occupations and the economy.
•    Steven Davis on the magnitude of earnings losses from job displacements — something the report says is a pertinent consideration of AI’s potential harms.
•    David Grusky on trends in income mobility, which the report references in relation to the economic effects of labor unions amid AI advances.
•    Daniel Ho, on the opportunities and risks of foundation models from a comprehensive report authored jointly with Brynjolfsson, Julian Nyarko and other researchers at the Center for Research on Foundation Models at the Stanford Institute for Human-Centered Artificial Intelligence; and his advisory work as a member of the National Artificial Intelligence Advisory Committee.
•    Charles “Chad” Jones on how the speed of economic progress is tied more to the rate of innovation than computational capacity; and, jointly with Bloom, on the phenomenon of diminishing returns from research and development.
•    Mark Lemley on the subtleties and complexities of copyright issues for AI-generated art.
•    Sean Reardon, on how economic residential segregation has increased over time — one reason why the reports says “targeted place-based policies” addressing AI impacts could be useful.

On remote work, housing and more

Following are more examples of cited studies on other key economic issues from SIEPR scholars:

•    Bloom on the impact of trade with China on U.S. employment and on innovation and productivity; a framework to examine public versus private investments in basic R&D; and how R&D affects product markets and tech innovation, as the report says the dynamics could apply to structural changes in clean energy.
•    Bloom and Davis, on their joint extensive research on the evolution of working from home; its implications around the world; its dampening effect on wage-growth pressures; and its impact on job vacancies across industries and occupations.
•    Marshall Burke on climate change effects on the economic productivity of rich and poor countries; the changing risks and societal burden of U.S. wildfires; the mental health effects of rising temperatures; the influence of climate change on human conflict; and income inequities in wildfire smoke protection.
•    Davis on a way to examine the flow of job vacancies and recruiting intensity.
•    Rebecca Diamond on the effects of the Low Income Housing Tax Credit on neighborhoods; how foreclosures cause sustained housing instability and financial distress; and, with Franklin Qian — a former graduate fellowship recipient and winner of the Student Discussion Paper Prize at SIEPR — on the effects of rent control.
•    Gopi Shah Goda on how long-term care insurance affects labor outcomes, increasing, the report notes as an example, the likelihood of adult children staying longer with full-time work.
•    Jones on the economic consequences of a declining population; how the nonrivalry of ideas is responsible for the rise in living standards; and fleshing out variables of economic growth.
•    Jonathan Levin on the employment-related trade-offs of multilateral contracting; on semiconductor R&D policy recommendations through his role on the President’s Council of Advisors on Science and Technology; and the use of advance market commitments with vaccine production — an approach the report says could be a strategy to mobilize clean energy developments.
•    Grant Miller on the role of public health improvements in curbing infectious disease.
•    Petra Persson and Maya Rossin-Slater, along with Kate Kennedy-Moulton, a former SIEPR predoctoral fellow, on maternal and infant health disparities; and Rossin-Slater, on the cost-effectiveness of the food stamp program, which, the report says, is an example of federal assistance that can also serve to alleviate the financial burden of housing.

Citations in the report also include former student affiliates or postdoctoral fellows of SIEPR — a testament to the institute’s mission in fostering the next generation of policy thought leaders. One example is Luca Braghieri, a former SIEPR graduate fellowship recipient who co-authored with SIEPR senior fellows Matthew Gentzkow and Hunt Allcott a 2019 paper on the welfare effects of social media. Braghieri’s recent study on social media and mental health is cited in the 2024 Economic Report of the President.