AI might raise r* due to wealth effects – Goolsbee
Impact on natural rate depends on whether productivity growth comes as surprise, says Chicago Fed president
Whether artificial intelligence increases or decreases the natural interest rate (r*) will depend on whether the associated productivity growth comes as a surprise, the president of the Federal Reserve Bank of Chicago has said.
At a conference hosted by the Hoover Institution at Stanford University on May 8, Austan Goolsbee discussed how AI-induced productivity growth would be likely to affect monetary policy.
“It makes a big difference whether you are talking about an unexpected increase in
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