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Dynamic General Equilibrium Model with AI Accumulation

Introduction

This is a basic economic model to study the impact of AI on the economy, where AI can be parameterized as a complement, substitute, or intermediate factor to labor. Currently, the model only computes the steady state and not transitional dynamics.

The model was developed for my undergraduate thesis and was originally programmed in GNU Octave. My primary goal was to demonstrate computational and macroeconomic modeling skills. The repository includes the thesis document (in Spanish) for those interested in the theoretical foundations, though the model's structure should be familiar to economists experienced with Dynamic General Equilibrium (DGE) models.

While this is more of a toy model than a production-ready economic tool, it has educational value for:

  • Learning to code DGE models
  • Serving as a base for extensions
  • Running efficiently on any modern computer

How to Use

  1. Clone the repository
  2. Run the model
  3. Modify parameters to perform comparative static exercises

For full parameter explanations and model derivation, consult the included thesis document. The mathematical formulation uses standard economic notation that should be accessible regardless of Spanish proficiency.

License

This project is licensed under the GNU General Public License v3.0 - see the LICENSE file for details.

Extension Suggestions

Potential future improvements include:

  • Adding transitional dynamics
  • Incorporating fiscal/monetary policy elements
  • Extending to a growth model framework
  • Adding calibration procedures (already done in MatLab, see the PDF file)
  • User interface for better interaction

Acknowledgments

Special thanks to Professor Gonzalo Fernández de Córdoba Martos for his guidance as thesis advisor and for inspiring this project.

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Basic Dynamic General Equilibrium (DGE) model that seeks to find the impact of AI on economy.

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