Panetta says AI gains distribution could shape inflation
ECB Governing Council member Fabio Panetta said central banks need to understand who benefits from AI-driven gains because the distribution can influence aggregate demand and inflation.
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MILAN, Sept 21 (Reuters) — Central banks need to understand who benefits from artificial intelligence-driven gains, as their distribution will help shape aggregate demand and inflation, European Central Bank Governing Council member Fabio Panetta said on Monday. AI is set to transform productivity and growth, labour and financial markets, and payment systems, Panetta said. If AI mainly creates new tasks and raises expected labour income, demand could increase before AI's full productivity benefits materialise, prolonging inflationary pressures, he added. Panetta, who is also governor of the Bank of Italy, was speaking at an event hosted by the National Bank of Ukraine.
Credibility is an essential asset of every central bank, but how it is built and preserved depends on the nature of the challenges faced, he said. Central banks cannot remain on the sidelines, Panetta said, adding that understanding changes underway is increasingly essential to central bank credibility. According to Panetta, if automation dominates, weaker consumption could cause the disinflationary effects of AI to emerge sooner. com; +39 06 8030 7736;)