Fed's Cook weighs pros and cons of AI on the economy
Federal Reserve Governor Lisa Cook discussed the dual impact of artificial intelligence on the economy, noting its potential to enhance productivity while also posing risks such as job displacement. She expressed optimism that increased productivity could lead to higher wages without triggering inflation. However, she acknowledged the disruptive nature of AI, which could negatively affect employment. Fed Chair Jerome Powell previously indicated that the central bank is examining generative AI's implications for productivity, inflation, and the labor market, recognizing both job losses and new job creation.
Federal Reserve Governor Lisa Cook assessed Thursday the impact of artificial intelligence on the economy, highlighting its potential for productivity growth alongside risks like job displacement.
On the upshots, Cook said she's optimistic that AI can boost overall productivity.
"Higher productivity provides scope for workers' wages to rise without stimulating inflation," the Fed governor said in opening remarks prepared for delivery at an event hosted by the Cleveland Fed and Columbus State Community College.
But this disruptive technology also has the potential for negative employment impacts, she said.
In July, Fed Chair Jerome Powell said the central bank was looking into the possible effects of generative AI on productivity, inflation and the labor market. He contended that it will eliminate some jobs, but also create some new jobs.