In 2024, around the time of Davos, you wrote an article titled “AI will transform the economy. Let’s make it work for humanity” that focused largely on the implications of AI for the job market. What is the verdict?
We certainly see benefits for humanity in the penetration of many applications of AI into the economy and the way we work. From agriculture to healthcare to education to transportation, we’re seeing AI deliver benefits. This adds a boost to productivity. The reason our economic growth is slow is mainly because productivity growth has been very disappointing, except in the United States, and this is where AI is the most powerful transformative force. We also see that we remain underprepared for the impact of AI on the job market. It is like a tsunami hitting the job market, especially in advanced economies, where it is estimated that 60% of jobs will be affected.
What type of policies do you recommend to address the risks associated with AI?
For advanced economies, focus primarily on penetration as well as regulation and ethics. Ensure that innovation is a source of productivity growth in all sectors of the economy and ensure that there is meaningful regulation and an ethical foundation to reduce the risk of this divergence in societies.
How do you use AI?
I’ve personally completed training on using productivity-enhancing tools twice, starting with Copilot, and then we have a few fund-specific AI assistants. We urge people to get creative and introduce AI-based productivity improvement tools.
It occurs to me that you are almost conducting a real economic experiment. Are you seeing productivity gains commensurate with your investment?
So far, yes. We are a data institution. The reason we are so predisposed to AI is that we have a large amount of data.
Inflationary pressures remain a concern and there is no real consensus on the best path forward. How should central banks approach next year? Central banks are under pressure, particularly here in the United States, to keep interest rates aligned with political interests. What are the risks?
The good news is that global inflation is trending down. Central banks have been an incredible source of confidence in a world of uncertainty. The independence of central banks is absolutely essential, especially in this rapidly changing world. We also recognize that the independence of central banks does not mean the absence of accountability. They need to continue to think about how they can demonstrate that they are accountable to people, that they have a rigorous process for evaluating their models and their decision-making process.
You are going to China soon. The Chinese economy is essential to global growth. What does a sustainable growth model look like for China amid all these challenges?
It’s like a fork in the road: either they continue with their growth model that has served them well for 40 years, which is export-driven with significant support coming from the Chinese government’s industrial policy, or they recognize that they are now so big that they need to move to a more consumption-based model. If China does not change this pattern and continues to sell cheap products to the rest of the world, it will inevitably become a major source of trade tensions itself. Countries could then be tempted to impose customs duties on Chinese products.
