It's the only thing anyone is taking about. I'm hearing the query down on the corner, out in the street...even Willy and the Poor Boys, everywhere.
From Marginal Revolution, July 7:
In standard models, a big dose of AI boosts productivity, which in turn boosts the return on capital, which then raises real interest rates.
I am less convinced. For one thing, I believe most of the gains from truly fundamental innovations are not captured by capital. Was Gutenberg a billionaire? The more fundamental the innovation, the more the import of the core idea can spread to many things and to many sectors.
Furthermore, over the centuries real rates of return seem to be falling, even though there are some high productivity eras, such as the 1920s, during that time. The long-run secular trend might overwhelm the temporary productivity blips, I simply do not know....
....MUCH MORE
As always his commenters have interesting and diverse perspectives.
