Monetary Matters with Jack Farley The Economic Effects of Technological Disruption & Artificial Intelligence | Nobel Laureate in Economics Peter Howitt
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Mar 5, 2026 Peter Howitt, Nobel-winning economist known for work on creative destruction, explains how innovation fuels growth while displacing workers and firms. He compares generative AI to past general-purpose technologies and explores its rapid adoption, who may be displaced or augmented, downstream inventions, superstar firms and antitrust concerns, and AI’s role as a research collaborator.
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Growth Through Creative Destruction Is Endogenous
- Growth stems from firm R&D that creates innovations which leapfrog incumbents and generate monopoly rents.
- Howitt and Philippe made Schumpeterian creative destruction operational with patent-race game theory inside a general equilibrium growth model.
AI Mirrors Past General Purpose Technologies
- Generative AI looks like previous general-purpose technologies: wide creation and destruction with benefits realized only after downstream innovations.
- The unique factor is the unprecedented speed of improvement and deployment, compressing discovery and adoption cycles.
Nobel Laureate Used ChatGPT In His Acceptance Lecture
- Howitt uses ChatGPT as his most efficient research assistant and even admitted inserting a ChatGPT paragraph into his Nobel lecture.
- He prompted ChatGPT for a paragraph on AI job destruction, then acknowledged it as the first-draft text in his speech.