Barr: AI May Boost Productivity in the Long Run While Reshaping Jobs in the Short Term

Federal Reserve Governor Michael S. Barr argues that generative AI is likely to become a broad, long-run productivity driver, but could cause meaningful short-term labor-market disruptions. Adoption could unfold gradually or rapidly, with sectoral shifts, retraining needs, and potential impacts on wages and inflation. Policy implications include addressing worker transitions and safety nets, while monetary policy remains cautious as AI-driven changes unfold and the economy assesses the pace of adoption and productivity gains.