- Inflation could be more-prone than it was in the past 25 years in a shock-prone world
- Central banks need to be closely attuned to how AI is affecting inflation, both indirectly and directly
- AI is expected to boost productivity, when labor productivity is rising, economy can grow more quickly without causing inflation
- AI could destroy more jobs than it creates and people may struggle to find jobs. This is a concern for us all
- We don't have much evidence that labor is being displaced by AI at rates that would lead to declines in total employment
- AI adoption could also lead to financial stability issues; operation risks could become concentrated in a few third-party service providers
- There is huge potential for central banks to use AI to understand how consumers and businesses are behaving
This speech focuses on some huge issues for the coming years that are critical to understanding the economy but doesn't touch on the short-term outlook for the economy or rates. I expect huge job losses from AI and a permanently-impaired job market.
