Can advanced AI lead to negative economic growth?

Considering the role of demand in the economics of AI

Can advanced AI lead to negative economic growth? Considering the role of demand in the economics of AI Alex Imas Jan 07, 2026 252 57 40 Share This essay is about the role of economic demand in AI-driven growth forecasts. The premise is simple: if advanced AI (or AGI, which I will use interchangeably) automates most labor and the wage share collapses, who will buy the increased output? If firms anticipate weak demand, will they keep investing and producing? Will the economy face a gap between potential and realized output, and actually shrink? Let’s take a simple parable, suggested to me by To

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