MILAN, Sept 21 (Reuters) – Central banks need to understand who benefits from artificial intelligence-driven gains, as their distribution will help shape aggregate demand and inflation, European Central Bank Governing Council member Fabio Panetta said on Monday.
• AI is set to transform productivity and growth, labour and financial markets, and payment systems, Panetta said.
• If AI mainly creates new tasks and raises expected labour income, demand could increase before AI’s full productivity benefits materialise, prolonging inflationary pressures, he added.
• Panetta, who is also governor of the Bank of Italy, was speaking at an event hosted by the National Bank of Ukraine.
• Credibility is an essential asset of every central bank, but how it is built and preserved depends on the nature of the challenges faced, he said.
• Central banks cannot remain on the sidelines, Panetta said, adding that understanding changes underway is increasingly essential to central bank credibility.
• According to Panetta, if automation dominates, weaker consumption could cause the disinflationary effects of AI to emerge sooner.
(Reporting by Sara Rossi; Editing Gianluca Semeraro and Jamie Freed)
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