Federal Reserve Chair Jerome Powell Investigates AI Impact on Productivity, Inflation, and Labor Market”.
Jerome Powell, the Federal Reserve Chair, is currently investigating the potential impacts of generative artificial intelligence (AI) on productivity, inflation, and the labor market. Speaking at a panel discussion at the European Central Bank’s Forum on Central Banking in Portugal, Powell noted that significant investments are being made in AI, suggesting a major shift in the future. However, it remains unclear whether AI adoption will lead to job elimination or enhancement.
Powell mentioned that while central banks may not have direct control over the effects of AI on the job market, the Federal Reserve is dedicating a substantial amount of time and resources towards understanding and analyzing the potential impacts. While they are not currently using generative AI, Powell mentioned that they are exploring other forms of AI and may incorporate them into their operations in the future.
The International Monetary Fund (IMF) has previously stated that the introduction of AI could significantly impact employment, especially in advanced economies. Approximately 40% of global jobs are at risk of being affected by AI, with 60% of jobs in advanced economies potentially being impacted. This could lead to changes in labor demand, wages, and hiring practices in these countries.
Citi released a report in June highlighting the potential impacts of AI on various industries. Finance jobs were identified as particularly susceptible to automation, with 54% of jobs having a high potential for automation and another 12% having the potential to be augmented by AI. Other industries such as insurance, energy, and capital markets also face a high potential for automation according to this report.
In conclusion, while there is still much uncertainty about how generative artificial intelligence will affect productivity and employment across different sectors and regions around the world; policymakers must continue to explore its possibilities while also considering its risks to ensure an equitable distribution of benefits among all stakeholders.
