Catalini's 'Simple Economics of AGI': the Measurability Gap and the Hollow Economy risk
naval · x · 2026-09-14
Naval shared Christian Catalini, Xiang Hui, and Jane Wu's 2026 working paper 'Some Simple Economics of AGI', a unified economic theory of the AGI transition.
- Core mechanism: automation cost falls faster than verification cost, creating a widening Measurability Gap between what agents can execute and what humans can verify—making verification, not intelligence, the binding constraint on growth.
- Framework: partitions work into four regimes and formalizes measurability-biased technical change.
- Risk conclusion: unless observability, accelerated mastery, and graceful degradation expand society's verification bandwidth, unverified deployment drifts toward a Hollow Economy of counterfeit utility.
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