BIS Economists Warn: AI Boom Increases Risk of Central Bank Monetary Policy Errors
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BIS Economists Warn: AI Boom Increases Risk of Central Bank Monetary Policy Errors
According to Yonhap News, economists at the Bank for International Settlements (BIS) warned in an analysis in their monthly bulletin that the AI boom is blurring economic signals, increasing the risk of central banks making serious policy errors. The analysis pointed out that AI's impact on investment, trade, and asset prices has reached an "observable" scale, sufficient to influence global economic prospects in real time, and continues to support economic growth amidst trade disputes and geopolitical shocks; U.S. spending on data centers and IT manufacturing facilities has risen to 0.8% of GDP, and the wealth effect from AI-driven stock price increases is also stimulating consumption. Meanwhile, if AI boosts productivity or triggers unemployment concerns, it may produce a disinflationary effect. BIS economists warned that short-term inflationary effects may already be emerging, while disinflationary effects will be more gradual; once central banks overestimate productivity gains or underestimate underlying demand growth, they will face the risk of keeping interest rates too low and inflation spiraling out of control.
Navigating Web3 tides with focused insightsTechFlow reports, July 29, according to Yonhap News Agency, economists at the Bank for International Settlements (BIS) warned in an analysis in their Monthly Bulletin that the AI boom is blurring economic signals, increasing the risk of central banks making serious policy errors. The analysis pointed out that AI's impact on investment, trade, and asset prices has reached an "observable" scale, sufficient to influence global economic prospects in real time, and continues to support economic growth amidst trade disputes and geopolitical shocks; US spending on data centers and IT manufacturing facilities has risen to 0.8% of GDP, and the wealth effect from AI-driven stock price increases is also stimulating consumption.
Meanwhile, if AI boosts productivity or triggers unemployment concerns, it may produce a disinflationary effect. BIS economists warned that short-term inflationary effects may already be emerging, while the disinflationary effect will be more gradual; once central banks overestimate productivity gains or underestimate underlying demand growth, they will face the risk of interest rates remaining too low and runaway inflation.
