Jason Furman

Thanks for having me.

The most misunderstood thing is the impact AI will have on the economy.

And what makes it the most misunderstood thing is if you think it's all going to be great and you're sure about that, you're wrong.

If you think it's all going to be terrible and you're sure about that, you're also wrong.

Why is that?

Because there's just a lot of uncertainty about what's coming ahead.

And I feel so many people put it in one bucket or the other, when in some sense, we need to be prepared for almost anything to be happening in our economy.

So having a certain amount of humility is always good in thinking about the future, but it's especially needed right now when it comes to AI.

The largest cause was the enormous fiscal response to COVID.

It was much larger than what was justified or needed.

In 2020, it made sense.

But by 2021, the economy was recovering rapidly.

We did another large dose.

The number two factor, which also was quite large, was global supply shocks, of which the Russian invasion of Ukraine was the most important in terms of what it did to oil prices and food.

And then number three was the Federal Reserve taking too long to respond to that inflation.

I'm not sure how consequential that error was, given that they cleaned it up very quickly.

Now, some people may think, well, a lot of what I just said was about the United States.

What about other countries they had inflation to?

Well, they also had pretty big fiscal responses.

They also had pretty delayed central bank responses.