Nobel-winning economist: AI won't bring back the era of fast growth

A Nobel laureate in economics told Bloomberg that artificial intelligence will not return Western economies to an era of rapid productivity growth. That period, by all appearances, is gone for good.

What the warning says

According to the economist, it makes no sense to bet on AI as a technology that can repeat the explosive productivity growth of past decades. He is referring to periods when advanced economies posted consistently high rates of labor productivity growth, such as the postwar decades or the IT boom of the late 20th century. In his assessment, that era has likely ended for good, and the current wave of AI will not revive it.

Why the claim is contested

Economists have spent several years debating whether AI can give the economy a boost on a comparable scale. Skeptics point to the so-called "productivity paradox": new technologies, from electrification to personal computers, took years to show up in growth statistics, until companies learned how to truly rebuild their business processes around them. Optimists counter that generative AI is spreading quickly through companies and expect the effect to build up with a lag of several years.

In the meantime, big tech companies keep pouring tens of billions of dollars into data centers and models, betting that the productivity payoff will arrive eventually, just later than the boldest forecasts predicted.

What it means

The warning highlights the gap between the investment frenzy around AI and the technology's still-unclear impact on real macroeconomic indicators. That question is increasingly being raised not only by skeptics, but also by winners of prestigious economics prizes.