Mary Daly

And now, oftentimes, people say, well, now AI is going to hurt the labor market, and so now I'm in double doom, as people say.

But I think, ultimately, the way many people think about AI is the investment part of any technology can actually boost demand for goods, services, and people

and can then raise the pressure on inflation.

But then the productivity part comes, and that's a disinflationary part.

You can see this is all about the timing.

And so what we end up investigating is not just the models, but asking questions.

Are the build-out of data centers raising prices for construction workers?

Are the build-out of data centers raising prices for metals and other things that go into them, the raw materials?

Are the

productivity gains, and then on the other side of that, are the productivity gains already affecting the cost structure of firms?

Do they see that?

And even if a series of one-off adjustments can actually change the cost structure, and if you look at profit margins, when prices haven't been rising as rapidly as they once were, and firms are saying they don't have as much power to pass through, you would think that they're doing something to help margin protection.

And so I think this is, there's something going on here, whether we want to link it all back to AI,

and then use that as a demonstrated proof that we're in a transformative state.

I think that's a little bit too far, but certainly something's happening.

And thinking about the productivity growth is exactly what we did back in the 1990s.

We saw evidence firms were being more productive.

We were interrogating how long that would last.

And interestingly, the 1990s, when I said it was the roaring 90s that followed, it was good growth, but it was also a good labor market.

a really strong labor market.