Bank of Japan Deputy Governor Shinichi Uchida described artificial intelligence as a major positive demand shock that is supporting economic activity and helping ease financial conditions through rising equity prices. However, he warned that the increase in AI-related corporate bond issuance is putting upward pressure on long-term interest rates, and current benefits could be offset if corporate profits stagnate. The BoJ struggles to assess AI’s impact on the neutral interest rate and the natural rate of unemployment, uncertainties it monitors alongside geopolitical developments and climate change. The Bank of Japan’s monetary policy meetings regularly discuss the implications of artificial intelligence for the economy as a whole.
Source: Read the original article
