Nor are they likely to choose a robot to look after their young children or elderly parents (tempting as that can sometimes sound). When it comes to forecasting the economy, I can quite believe a thinking machine might over time displace me. But it is less likely an “Andy Robot” will be giving this lecture to the TUC even a decade from now. Even if this diagnosis is right, it nonetheless may suggest a fundamental reorientation in the nature of work could be underway. We may already be seeing early signs of that in the move towards part-time working, temporary contracts and, in particular, self-employment. Some have speculated that these seismic shifts could result in the emergence of a “new artisan” class : micro-businesses offering individually-tailored products and services, personalised to the needs of customers, from healthcare and social care, to leisure products and luxuries. This really will be Back to the Future. Yet the smarter machines become, the greater the likelihood that the space remaining for uniquely-human skills could shrink further. Machines are already undertaking tasks which were unthinkable – if not unimaginable – a decade ago. The driverless car was science fiction no more than a decade ago. Today, it is scientific fact. Algorithms are rapidly learning not just to process and problem-solve, but to perceive and even emote (Pratt (2015)). As digital replaced analogue, perhaps artificial intelligence will one day surpass the brain’s cognitive capacity, a tipping point referred to as the “singularity” (Stanislaw (1958))).
In that case it could be worth discussing a comeback for the tolerance band, but reintroducing the band would neither contribute to higher inflation expectations nor consequently to a rise in interest rates. Monetary policy cannot solve the problem of rising debt and housing prices What can be said then about the growth of household debt and housing prices? After all, one issue central to the criticism is that the low interest rate contributes to further increases in debt and housing prices. 13  The Riksbank (2010). 14  For example, Heikensten and Vredin (1998, pp. 585-586) noted that "A tolerance band could be a reflection of the fact that the central bank does not consider it important to aim for an inflation target in the middle of the band. Instead it may, as long as inflation is contained within this band, want to focus on achieving other targets, such as production or employment for example. This is portrayed at times [...] as "opportunistic" monetary policy. We do not feel, however, that this was the reason certain countries chose to put a tolerance band around their inflation target". 8  BIS central bankers’ speeches  It has been obvious to those who have followed the monetary policy debate that the Riksbank shares many people’s concerns about this development. This is clear from reports, minutes, speeches and a number of debate articles. The Riksbank has therefore pointed out the necessity of measures in other policy areas for several years.