Can advanced AI lead to negative economic growth?
Summary
Imas models a demand-side path to falling output after extensive automation. If the wage share collapses and income shifts toward already-satiated capital owners with a lower propensity to consume, aggregate demand can shrink faster than cheaper production expands consumption; weak investment can deepen the effect.
Why it matters
The model shows that productivity capacity and realized output can diverge when automation changes income distribution and demand, adding a conditional counterexample to purely supply-driven AI-growth stories.
What to keep in mind
Imas considers negative growth unlikely. The result requires an extreme combination of labor displacement, satiation, weak investment, constrained interest-rate adjustment, and little redistribution; it is a mechanism, not a baseline forecast.