BIS economists warn: AI boom increases the risk of central bank monetary policy errors

Jinse Finance reported on July 29, citing Yonhap News Agency, that economists at the Bank for International Settlements (BIS) warned in their monthly bulletin analysis that the AI boom is blurring economic signals and increasing the risk of major policy missteps by central banks. The analysis pointed out that the impact of AI on investment, trade, and asset prices has already reached an "observable" scale, enough to influence the global economic outlook in real time and continue to support economic growth even amid trade disputes and geopolitical shocks. Spending on data centers and IT manufacturing facilities in the United States has risen to 0.8% of GDP, and the wealth effect from AI-driven stock price increases is also stimulating consumption. At the same time, if AI boosts productivity or triggers concerns about unemployment, it could have a disinflationary effect. BIS economists warned that short-term inflationary effects may already be emerging, while disinflationary effects will be more gradual. If central banks overestimate productivity gains or underestimate underlying demand growth, they risk keeping rates too low and letting inflation spiral out of control.