Towards a new monetary policy framework for the AI age
AI may render the traditional monetary policy toolkit less effective and the familiar rules of engagement obsolete, argues Biagio Bossone
Central banks around the world are embracing artificial intelligence with growing confidence. Machine learning tools now assist in inflation forecasting, real-time GDP tracking and sentiment analysis. Natural language processing is mining central bank speeches and media narratives for subtle shifts in tone. AI is expected to make central banks smarter, faster and more agile.
This view is not wrong, but it is dangerously narrow. The most profound implications of AI for central banking lie not in
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