Governor Tiff Macklem said there is a lot of uncertainty about the future impact of artificial intelligence (AI) on the Canadian economy, and that the central bank is carefully analysing how inflation management might change.
Speaking in Toronto on Friday, Macklem said the central bank is taking a cautious approach to understanding the impact of AI on the Labor market and inflation. He explained that AI technology can improve Labor productivity, thereby raising living standards and stimulating economic growth. Such productivity gains can have positive effects on the overall economy without stimulating inflation. However, he also raised concerns that in the short term, investment in AI could lead to increased capital spending by businesses, which could boost demand, and this could increase inflationary pressures.
Macklem added that while AI could cause inflation in the short term, it has the potential to contribute to economic growth in the long term by increasing productivity. He also expressed concerns about negative scenarios, such as the possibility that AI could replace existing jobs rather than create them, or that it could reduce competition between industries. He emphasized that if these negative effects become reality, they could have a negative impact on the entire economy.
Governor McClum said, “Close cooperation between academia and industry is necessary to more clearly understand the impact of AI on the economy,” and “We need to explore various scenarios and prepare policy response measures based on them.”