AI’s Macroeconomic Challenges and Promises

Simone Lenzu

No 20260520, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: In the third quarter of 2025, America’s largest tech firms for the first time spent more on capital investment than they earned from operations. The implication is that AI, a technology with the potential to make the economy more productive, is, for now, absorbing resources faster than it is generating returns. This post discusses how the tension between AI’s long-run promise and its short-run costs affects the outlooks for inflation, real activity, and financial stability.

Keywords: artificial intelligence (AI); central banking (search for similar items in EconPapers)
JEL-codes: E52 O33 (search for similar items in EconPapers)
Date: 2026-05-20
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DOI: 10.59576/lse.20260520

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