The “Speed” and “Breadth” of Economic Growth: The Disequilibrium between Productivity and Consumption Capacity in the AI Era and the New Functions of Government

The “breadth” of economic growth refers to the pervasiveness of industries and participants driving economic growth, as well as the extent to which the benefits of growth are widely shared across the population. This paper advocates that economic theory and policy research should focus not only on the “speed” of growth but also on its “breadth.” At present, the rapid advancement of technologies such as automation, the internet, and artificial intelligence (AI), while significantly enhancing social productivity, has also brought about the challenge of a narrowing “breadth” of economic growth. This disrupts the economic circulation of “production(employment)-distribution-exchange-consumption”, causing the expansion of social purchasing power and social consumption capacity to lag behind progress in social productivity. Consequently, a structural imbalance emerges at the macroeconomic level, characterized by strong supply but relatively weak demand. As AI technology continues to mature further in the future, the pressure of a narrowing “breadth” of economic growth is likely to persist or even intensify. How to expand the “breadth” of growth, promote the balanced development of social productivity alongside social purchasing power and social consumption capacity, and transform the economy from one characterized by “strong supply but relatively weak demand” to one with “both strong supply and strong demand” is emerging as a major and enduring challenge for macroeconomic governance in the age of AI. To this end, governments need to fulfill new functions in areas such as labor and employment, income distribution, and public consumption, in order to ensure that AI broadly benefits a wider range of industries and populations. This will constitute a fundamental area for in-depth research in the field of Government and Economics in the age of AI.