causal
AI Could Raise Interest Rates Despite Demographics
AI will raise the real interest rate: although demographics normally lower rates because fewer workers mean lower returns on machines, if AI substitutes for labor rather than complementing it, that downward effect need not hold even in models like Samuelson's or Solow's, while AI also raises productivity.
causalpending
Speaker
Kenneth RogoffEvidence Quote
“It does raise productivity, but the usual thing about demographics is, there are less people to work with the machines, and therefore, the return on the machines is lower, and the interest rate goes down. But if the people are being substituted for, which is new... you won’t necessarily, even in a theoretical model like Samuelson’s or Solow’s, get that effect.”
Created: 6/13/2026, 3:28:48 AM
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