Fed's Lisa Cook Anticipates AI-Driven Productivity Growth, Disinflationary Impact in Long Run

Oct 1, 2024, 03:14 PM

Federal Reserve Governor Lisa Cook has expressed that artificial intelligence (AI) is expected to drive a significant increase in productivity growth. However, she acknowledges substantial uncertainty surrounding this forecast. Cook also noted that while AI is likely to be disinflationary in the long run, its short-term impact on inflation will be mixed. Additionally, there is evidence suggesting that AI could allow for more wage growth without triggering inflation. Cook hopes that productivity improvements from AI will serve as a counterweight to inflation, though these improvements will come with long and variable lags. Cook delivered these insights during a speech at the AtlantaFed, which was available to watch live.