Part 7/13:
- Inflation could decline or become unpredictable: with supply overtaking demand, prices could fall, hurting businesses and economic stability.
This scenario flips the traditional expectations, forcing the Fed and policymakers into uncharted territory.
The "Bombshell": An Economy on the Edge
The big secret — one they are quietly aware of but haven't openly acknowledged — is that AI-induced productivity growth is set to upend the very basis of current economic theory. Many economists or policymakers might dismiss this as just another technological leap, but it’s different.
Productivity no longer correlates positively with employment.
The so-called "effective" growth could occur even as unemployment skyrockets.