Two arguments dominate the debate on AI and the economy. One says a superintelligent AI leaves nobody with income to spend, so demand, and eventually the economy, collapses. The other says AI stays mediocre, the bubble bursts, and human labor stays scarce and valuable. Both treat AI's capability level as the variable that decides the outcome. It is not, and a formal model built from three existing, cited streams of economic research shows why.
Synthesizing Acemoglu & Restrepo's task-based automation framework, the Bhaduri-Marglin Kaleckian demand model, and Korinek & Stiglitz's policy-redistribution result, this piece derives a single testable Distributional Solvency Condition. Capability appears on both sides of the inequality, which is why it cannot decide the outcome on its own; the reattachment rate, how much AI-driven capital income is reattached to broad consumption power, does. An interactive model below lets you test the condition yourself, including presets for the United States, India, and the rest of the world.
The rest of this analysis is reserved for RAYSolute clients
RAYSolute research is written for the institutions that commission it. Clients read the full library as part of their engagement. If you would like access, write to us and we will set it up.
Request access