Nobel Prize-winning economist Christopher Pissarides told the Royal Economic Society conference in Newcastle on August 1 that AI will not return Western economies to the era of rapid productivity growth seen in past decades [1, 2, 3, 4]. He said around 40% of jobs in the US and UK, including nursing and hospitality, are largely unaffected by AI, making widespread productivity gains unlikely in those sectors. “There is up to 40%, or at least a big number of jobs in the UK, which are not exposed to AI so they are not going to get productivity gains because of AI,” Pissarides said [1].
Pissarides expressed doubt that AI will spark a new wave of economic growth comparable to the computer boom of the 1980s and 1990s. “I doubt there will be a new computer boom equivalent to what we had in the 1980s and 1990s,” he said [2]. He added, “It’s just not practical to talk about high productivity growth. I think we should be resigned to the fact that the days of fast productivity growth are over, whatever we do,” highlighting pessimism about near-term economic expansion from technology [2].
However, Pissarides noted that for optimistic growth predictions to be realized, sectors highly exposed to AI, such as finance, must achieve substantial productivity gains [1, 2, 3, 4].
Bank of England Governor Andrew Bailey offered a more hopeful view, calling AI “potentially game-changing” for economic growth but cautioning that its effects will take time to materialize. “AI may well ride to the rescue,” Bailey said [1].
Reports summarizing Pissarides’ views were published by multiple outlets on August 7 [1, 2, 3, 4].
