Generative AI’s impact on inflation unclear – BIS study
Inflation could worsen if people anticipate jump in productivity, authors say
Generative artificial intelligence (AI) will likely drive up productivity in the economy, but its impact on inflation is unclear, according to a paper published by the Bank for International Settlements (BIS).
Iñaki Aldasoro, Sebastian Doerr, Leonardo Gambacorta and Daniel Rees study the growth of AI in a macroeconomic multi-sector model. They find AI significantly raises output in an economy, along with consumption and investment, in the short and long run.
How inflation reacts to this rides on
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