AXIOS (Neil Irwin) - Why AI makes central banking tougher
Central bankers, as a rule, try to maintain stable prices, a strong job market and a sound financial system. The AI boom is a complexifier on all three fronts. The big picture: AI is blurring the usual indicators that central bankers rely upon to set policy, a new paper from a leading international body finds, simultaneously affecting the supply and demand sides of the economy and driving both structural and cyclical change. - The upshot, per the Bank for International Settlements — the Basel, Switzerland-based central bank for central banks — is that the rules of thumb on which policymakers have long relied are all being shuffled at once. State of play: In the U.S. and other hotbeds of AI innovation, an investment boom in the near…