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This column analyses the AI supply chain and the market structure of every input layer, highlighting the economic forces shaping the provision of AI and the role of big techs in each input market. Big techs pose challenges to consumer choice, innovation, operational resilience, cyber security, and financial stability.
Big techs’ AI empire
Economists have long struggled to measure the informal economy, despite its significant role in global economic activity. Previous methods have relied on indirect proxies such as cash circulation or electricity usage, or on inferences based on highly structured macroeconomic models. This column by Francesco Pappadà and Kenneth Rogoff introduces a new, algorithmic and easily updateable approach to estimating informal activity in Europe, utilising VAT data and consumption surveys. While the approach works particularly well for Europe, it can in principle can be extended to other countries where value added taxes are a major source of revenue.
