Age of AI — Episode 2: When Models Meet Reality: AI and the Future of Economic Analysis

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 AIThis episode is a sequel to Episode 1, and it explains how AI is changing the practice of economics long before empirical analysis begins.Read the full article and graphic analysis: https://blog.econworks.com/p/age-of-ai-episode-2-when-models-meet?r=562wriExplore more visual economics content: https://econworks.comYouTube: https://www.youtube.com/@EconWorks-d3eSubstack: https://blog.econworks.com This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit blog.econworks.com/subscribe