Another ongoing structural shift with monetary policy implications is the increased use of artificial Intelligence (AI). To the extent that AI constitutes a general-purpose technology, like, for instance, personal computers, its potential productivity effects may be immense. The impact of AI on the natural rate of interest is highly uncertain at this point but will most notably depend on the labour market response.
In contrast to previous disruptions, AI holds the potential to displace workers across the skill and income distribution, including high-skilled workers. Perhaps the most important challenge posed by AI is the potentially significant increase in inequality between displaced workers and those remaining in employment and benefiting from AI in a labor-augmenting way. This potential intensification of inequality could further weigh on the natural rate.