AI: Warsh (Fed), ‘it will bring great benefits to the global economy’

‘It’s going to be a bumpy ride’

(Il Sole 24 Ore Radiocor) - Artificial intelligence will bring ‘great benefits to the global economy’. This was the view expressed by Fed Chairman Kevin Warsh in a conversation with the Managing Director of the International Monetary Fund, Kristalina Georgieva. “The advent of this new technology is the most significant change for the United States and the global economy that I have ever seen in my lifetime,” added the banker. According to Warsh, this new technology “is affecting the supply side and so, as a central banker, you have to be concerned about price stability and full employment, but you must recognise that whilst this is a shock, in the medium term it is a positive shock for the supply side”. Warsh is convinced of this and adds: “We do not know what effects it will have on employment in 12–18 months’ time, but I am convinced that it will lead to greater productivity in economies and we will see greater prosperity; however, the path to achieving that outcome will be very bumpy.” AI will also change the way central banks conduct monetary policy: the new tools at their disposal will help in analysing the data to understand the trend in core inflation.

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