Finance and Accounting Research Seminar - Andrew Chen (Federal Reserve Board) "Hedging the Singularity"

Friday, 15 May 2026 at 13:30

Finance and Accounting Research Seminar - Andrew Chen (Federal Reserve Board)

Event details

A negative AI singularity could devastate ordinary investors while enriching AI capital owners. We show that AI stocks command a hedging premium because they pay off when displacement risk spikes marginal utility. Incomplete markets are central: without them, the hedging premium vanishes. Market incompleteness can inefficiently block AI development, and government transfers---normally crippled by deadweight costs---become viable when singularity-scale growth generates surplus so large that even heavy waste leaves the household better off. This paper---itself written by AI agents, with only a 600-word specification from a human economist---is a small demonstration of the risk it models.

Organiser

University of Exeter Business School - Finance and Accounting

Location

Marchant Syndicate (Building One)