04/09/2026
AI may not yet be reshaping the macroeconomy, but it could still shift the balance between growth and who benefits from it. In their paper, our colleagues Panashe Bera and Gregory Bond identify two underappreciated risks: a modern-day Engels' Pause, where productivity gains flow disproportionately to capital owners, leaving consumer-driven economies vulnerable to weak demand; and a capex boom-and-bust, as AI investment outpaces demand in a pattern uncomfortably reminiscent of 2001.
Applying Nobel Laureate William Nordhaus's diagnostic framework to a decade of new data, their findings are clear: productivity is not accelerating, but the distributional and investment risks are very much real.
Read the full paper: https://ow.ly/FUc250ZFKS9