Technological progress and monetary policy: Managing the fourth industrial revolution

Stephen S. Poloz

Journal of International Money and Finance, 2021, vol. 114, issue C

Abstract: This paper looks at the implications for monetary policy of the widespread adoption of artificial intelligence and machine learning, which is sometimes called the “fourth industrial revolution.” The paper reviews experiences from the previous three industrial revolutions, developing a template of shared characteristics: new technology displaces workers; investor hype linked to the new technology leads to financial excesses; new types of jobs are created; productivity and potential output rise; prices and inflation fall; and real debt burdens increase, which can provoke crises when asset prices crash.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:114:y:2021:i:c:s026156062100022x

DOI: 10.1016/j.jimonfin.2021.102373

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