Roundup #78: Roboliberalism

I kind of want to write about AI every day these days, but I’ve got to pace myself so you all don’t get overloaded. So here’s a roundup post with only one entry about AI. Just one, I promise!

Well, OK, there’s also a podcast episode about AI. I went on the truly excellent Justified Posteriors podcast to talk about the economics of AI with Andrey Fradkin and Seth Benzell. It was truly a joy to do a podcast with people who know economics at a deep level!

Justified Posteriors

Noah Smith on Blogging, AI Economics, and Elite Overproduction

We sit down with prominent blogger and economist Noah Smith to dig into the disconnect between AI hype and current macroeconomic reality. The central puzzle: if a “god machine” driving 20% annual GDP growth is truly imminent, why aren’t real interest rates skyrocketing as people borrow against a much wealthier future? Noah’s take is that markets are pri…

Listen now

7 days ago · 16 likes · Andrey Fradkin and Seth Benzell

Anyway, on to this week’s roundup.

1. Did AI cause a productivity boom in 2025? We don’t know.

Erik Brynjolfsson believes that AI caused a productivity boom last year:

Data released this week offers a striking corrective to the narrative that AI has yet to have an impact on the US economy as a whole…[N]ew figures reveal that total payroll growth [in 2025] was revised downward by approximately 403,000 jobs. Crucially, this downward revision occurred while real GDP remained robust, including a 3.7 per cent growth rate in the fourth quarter. This decoupling — maintaining high output with significantly lower labour input — is the hallmark of productivity growth…My own updated analysis suggests a US productivity increase of roughly 2.7 per cent for 2025. This is a near doubling from the sluggish 1.4 per cent annual average that characterised the past decade…

Micro-level evidence further supports this structural shift. In our work on the employment effects of AI last year, Bharat Chandar, Ruyu Chen and I identified a cooling in entry-level hiring within AI-exposed sectors, where recruitment for junior roles declined by roughly 16 per cent while those who used AI to augment skills saw growing employment. This suggests companies are beginning to use AI for some codified, entry-level tasks.

But Martha Gimbel says not so fast:

There are three reasons why what we are seeing may not actually