, Columnist
AI Could Have a Surprising Effect on Interest Rates
Artificial intelligence will improve productivity, which usually means lower rates. But it will also lead to greater demand for capital.
Also among the things AI will transform: washing machines.
Photographer: Krisztian Bocsi/Bloomberg
As improvements in artificial intelligence continue apace, so do questions about how AI will influence economies, asset prices and — the question of the moment — interest rates: Is AI more likely to make them go up or down?
You might think economists would have a simple handle on such a straightforward query, but the both macroeconomics and AI are complex. Nevertheless, I have a bold prediction: Real inflation-adjusted rates will go up, and for a considerable period of time.