Miguel Afonso Caetano"Goolsbee pointed out that general-purpose technologies such as electricity and computing can create lasting productivity gains, the kind that make whole societies wealthier.
Whether AI is one of those technologies will only become clear over time. How long before we’ll know? “Years,” Goolsbee said.
In the meantime, there’s another complication. The immediate risk to employment may not be AI itself, but the way companies, seduced by its promise, overinvest before they understand what it can actually do. Goolsbee reached back to the internet bubble, when companies spent wildly on laying fiber cables and building capacity. “In 2001, when we found out that the growth rate of the internet is not going to be 25 percent a year, but merely 10 percent—which is still a pretty great growth rate—it meant we had way too much fiber, and there was a collapse of business investment,” Goolsbee said. “And a bunch of people were thrown out of work the old-fashioned way.”
A similar crash in AI investment, if it comes, would likely look familiar: painful, destabilizing, and accompanied by surges of CNBC rants and recriminations. But it would amount to a financial reset, not a technological reversal—the kind of outcome economists are especially good at recognizing, because it resembles a thing that’s happened before.
This is the paradox of economics. To understand how fast the present is hurtling us into the future, you need a fixed point, and the fixed points are all in the past. It’s like driving while looking only at the rearview mirror—plenty dangerous if the road stays straight, catastrophic if it doesn’t."
https://www.theatlantic.com/magazine/2026/03/ai-economy-labor-market-transformation/685731/
#AI #GenerativeAI #Productivity #AIBubble #Economy #Automation #Economics #MassUnemployment
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