Central Banks in the Age of Artificial Intelligence (panel organised by the European Central Bank)
Chair: Luis Garicano (LSE)
Speakers: François Villeroy de Galhau (Governor, Banque de France), Alessandra Bonfiglioli (University of Bergamo) and Jon Danielsson (LSE)
In recent years, there have been transformative advances in AI towards Artificial General Intelligence. It is expected that AI will alter fundamentally the basic structure of the global economy, by diminishing the role of labor while raising productivity. This process may significantly impact the value of education and human capital and ultimately economic growth, but it also raises concerns about job disruption and income inequality. While there is considerable uncertainty regarding the exact extent to which AI will affect the economy, it will likely have significant implications for monetary policy making. This is true both in terms of the technical frontiers that AI opens and in terms of the forthcoming adjustments in the economy at large. As an example of the former, Central Banks are already starting to use machine learning, neural networks, and natural language processing tools in a range of tasks, from monitoring financial transactions to performing macroeconomic projections to maintaining financial stability. As an example of the latter, monetary policy makers have already started work on adjusting their macroeconomic models to account for the effect of AI adoption on the composition of labor, on labor market slack, and on the Phillips curve, among others. Speakers in the panel will touch upon topics related to how AI is expected to affect monetary policy transmission, bank supervision, financial stability, labor markets, and the rate of growth. They will discuss the steps that Central Banks are already taking, or planning to take, in order to ensure that they reap the benefits of AI, both in terms of effective policy making and in terms of internal process reengineering.
