new York
CNN
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Jan Hatzius predicted a soft landing late 2022, when many feared a recession inevitable.
Goldman Sachs’ chief economist made a name for himself make the opposite call in 2008warning that toxic mortgages would trigger a recession.
Today, Hatzius offers some rather optimistic predictions for another controversial topic in society today: artificial intelligence and what it means for the American economy.
Hatzius told CNN in an exclusive interview that he believes AI will significantly accelerate economic growth over time by making workers much more efficient.
“I see it as a way to improve productivity,” Hatzius said. “A large number of workers in the economy will become more productive. It’s very, very likely.
This increase in productivity is expected to be so significant that it led Goldman Sachs to revise upwards its long-term forecast for US gross domestic product (GDP) last year.
AI chatbots can help workers brainstorm ideas, conduct research, write reports, create presentations, discover new topics, and identify patterns in vast amounts of data. Even the Treasury Department and the IRS are turning to AI to fight financial crime and find tax evaders.
Of course, this doesn’t mean that AI is perfect. It’s not. AI chatbots have been accused of bias and creation historically inaccurate images of people. AI tools are also known to sometimes “hallucinate” in a very credible way.
There is also a very real risk that AI will replace some workers. Generative AI is already capable of writing detailed emails, summarizing dense books, creating witty ads, and conjuring up photorealistic images – all tasks that only humans were capable of accomplishing previously.
“It will destroy employment in some areas,” Hatzius told CNN. “There will be segments of the labor market where tasks can be replaced. And to some extent, that’s going to lead to a reduction in employment in this country. But then you will find other ways to innovate and create more jobs elsewhere.”
White-collar workers are considered particularly exposed to these disruptions.
Goldman Sachs previously estimated that up to 300 million full time jobs around the world could be automated in some way with generative AI.
Hatzius acknowledged that it is difficult to predict exactly which jobs will be destroyed and which will be saved.
“It’s the story of economic growth and innovation for hundreds of years: you have an innovation that essentially saves labor and reduces employment in some areas, but then boosts it in others,” he said. “It is difficult to say how this balance will work in the short term. But where I’m much more confident is that it can significantly contribute to growth over time.
Satyen Sangani, economist and CEO of data intelligence unicorn Alation, said increasing AI productivity would help offset workforce stagnation in the United States and elsewhere.
“Many baby boomers are retiring and the workforce is becoming scarce. AI could help slow the rate of decline in the workforce,” Sangani said.
For example, Sangani highlighted how AI chatbots can help some customer service employees in understaffed hotels and medical professionals who struggle to sift through complex medical records.
“These workers will be supplemented, not replaced, by AI,” Sangani said, while adding that there are also places where AI will replace workers.
Even if AI accelerates economic growth, there is no guarantee that everyone will benefit.
Earlier this year, the International Monetary Fund estimated that almost 40% of jobs worldwide could be affected by AI and warned that this trend is likely to worsen inequality.
To combat the impact of AI, the IMF has urged governments to establish social safety nets and worker retraining programs.
In the meantime, investors continue to be captivated by the potential of AI. They are investing billions of dollars in AI stocks, fueling a new gold rush on Wall Street.
But some fear the AI boom is overblown.
Jeremy Grantham, who predicted the dot-com crash in 2000 and the financial crisis in 2008, recently warned that AI is a bubble that may start to burst.
