Speaking at the National Bureau of Economic Research Summer Institute last week, US Fed Governor Lisa Cook outlined how artificial intelligence is reshaping the economy, reframing monetary policy assumptions, and challenging the way institutions — including the Fed itself — operate.
Cook positioned AI as a new general-purpose technology, akin to electricity or the printing press, with the potential to broadly enhance productivity and accelerate innovation. However, the process will not be frictionless, she emphasized. AI may ultimately help reduce inflationary pressures, but transitional dynamics — like investment booms or labor displacement — could complicate the near-term economic picture. "It is good to be humble about our understanding of its exact effects," she said, underscoring the importance of ongoing research and adaptability in monetary policy.
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