The macroeconomics of artificial intelligence

ARTIFICIAL intelligence (AI) is likely to be among the most transformative technologies of our time. The nature of the vast changes ushered in by AI – most notably potential efficiency gains in both white- and blue-collar occupations – can partly explain the attention the technology has garnered, particularly on the heels of developments in large language models such as ChatGPT.

Although the technology itself is wholly new, the macroeconomic challenges associated with AI are not. History provides ample evidence that, while AI is unlikely to spur joblessness or mass unemployment, the likelihood of rising inequality is high. And this brings with it a host of monetary and macroeconomic considerations that will impact economists and central banks alike.

What are the macroeconomics of AI?