Economic models are powerful—but only if their underlying assumptions are valid.
In this episode we explore how artificial intelligence is changing the way economists test these assumptions.
Instead of settling for one model, AI lets economists produce hundreds of alternative versions, test sensitivity, and better understand which conclusions are robust.
Topics include:
The three-step process that economists use to test models
Assumptions are important
Sensitivity analysis assisted by AI
Algorithmic pricing as an example
Human judgment versus computer power
Why economists are more valuable, not less, in the age of AI
This episode is a sequel to Episode 1, and it explains how AI is changing the practice of economics long before empirical analysis begins.
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