AI, explained by economics. A short book by Allan Pedersen.

The confusing parts of the AI story — the half-trillion-dollar spending spree, the hype, the job fears, the chip wars — become legible through the ordinary tools of a first economics course: supply and demand, production, cost, competition, externalities. Each of the fifteen short chapters opens with one concrete puzzle from the news and resolves it with one economic tool, ending with a “What to watch” list of indicators you can check yourself and a “Dig deeper” list of sources. The numbers (marked “as of mid-2026”) will date; the way of thinking, we believe, will not.

This book was written with substantial AI assistance under the author's direction and editorial control — see the disclosure in the front matter.