Sanaichi Uchida: The surge in demand caused by artificial intelligence may affect neutral interest rates

Vice Governor of the Bank of Japan, Shinichi Uchida, stated that the surge in demand caused by artificial intelligence is driving inflationary pressures and long-term interest rates, which may have complex impacts on neutral interest rates. Artificial intelligence, as a positive demand shock, brings upward pressure to the economy and prices, while also affecting the supply side by increasing productivity and enhancing capital stock. The large-scale issuance of bonds by technology companies has pushed up long-term yields, making financial conditions tense. Artificial intelligence may render certain forms of human capital obsolete and impact social inequality. (Source: Jin Shi)