The impact of artificial intelligence on output and inflation

Inaki Aldasoro, Sebastian Doerr, Leonardo Gambacorta and Daniel Rees

No 19604, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We construct an index of industry exposure to artificial intelligence (AI) to calibrate a macroeconomic multi-sector model. At the aggregate level, AI significantly raises output, consumption and investment in the short and long run. The inflation response depends on AI’s anticipated impact on productivity: When not anticipated, AI is initially disinflationary; when fully anticipated, inflation rises immediately. At the sectoral level, a sector’s initial AI exposure has little correlation with its long-term output increase. However, output grows by twice as much for the same increase in aggregate productivity when AI affects consumption rather than investment goods sectors, through sectoral linkages.

Keywords: Artificial intelligence; Inflation; Output; Productivity; Monetary policy (search for similar items in EconPapers)
JEL-codes: E31 J24 O33 O40 (search for similar items in EconPapers)
Date: 2024-10
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