Generative AI’s impact on inflation unclear – BIS study

Generative artificial intelligence (AI) will likely drive up productivity in the economy, but its impact on inflation is unclear, according to a paper published by the Bank for International Settlements (BIS).

Iñaki Aldasoro, Sebastian Doerr, Leonardo Gambacorta and Daniel Rees study the growth of AI in a macroeconomic multi-sector model. They find AI significantly raises output in an economy, along with consumption and investment, in the short and long run.

How inflation reacts to this rides on