AI's Double-Edged Sword: Cheaper Goods, Fewer Jobs

AI is making waves in the economy. It might lower prices but also cut jobs. Chen Zhao, a big shot in economics, thinks AI will push inflation down to below 2% by next year. That's good news for shoppers, but not so great for workers. AI makes things cheaper. It boosts productivity. This could bring inflation down to pre-pandemic levels. The Fed might then cut interest rates to keep the economy humming. But low inflation isn't always a good thing. It can slow down spending and hiring. Big names in tech agree. Sam Altman and Rick Reider think AI will drive prices down. They say AI does more with less. But there's a catch. Lower prices might come at the cost of jobs. AI is already making hiring slow. And it's not the only factor. Trade policy and immigration also play a role.Not everyone is on board. Some think AI won't lower inflation. Tariffs and other factors are pushing prices up. Plus, AI data centers are driving up electricity prices. Some Fed members think inflation risks are high. They want to keep interest rates steady. There's also doubt about AI's promises. Will it really save labor? Or will it just shift jobs around? Only time will tell. But one thing's for sure. AI is changing the game. And it's not just about cheaper goods. It's about who reaps the rewards.