Monetary policy must be more agile during AI transition – study
Bank of Italy paper says inflationary developments offer more reliable guide than long-term r*
Monetary policy may keep price growth more stable during the artificial intelligence boom when it reacts to current inflationary developments, rather than to the value of the economy’s long-term equilibrium rate, a Bank of Italy study suggests.
In their paper, published on October 8, Lucia Esposito, Andrea Fabiani, Elia Moracci, Andrea Papetti and Massimiliano Pisani use a new Keynesian model to estimate the effectiveness of alternative monetary policy approaches as the impact of AI-driven
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