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Journal Article
Has AI Improved Productivity?
Research Spotlight on "Does Machine Translation Affect International Trade? Evidence from a Large Digital Platform." Erik Brynjolfsson, Xiang Hui, and Meng Liu. National Bureau of Economic Research Working Paper No. 24917, August 2018.
Briefing
The Productivity Puzzle: AI, Technology Adoption and the Workforce
In 1987, economist Robert Solow said, "You can see the computer age everywhere but in the productivity statistics."1 This quote underscores the challenges in tracing the effects of information technology and automation on productivity and the economy at large. Understanding the role of technology in labor productivity growth remains an ongoing quest in economics, one made even more pertinent by recent advances in artificial intelligence (AI) as well as the further adoption of generative AI and large language models (LLMs).Estimates of the effect of AI on economic and productivity growth range ...
Working Paper
How Demand for New Skills Affects Wage Inequality: The Case of Software Programmers
We study how the demand for programming skills has impacted inequality. We create a new dataset with information on wages, employment, and software of Brazilian programmers, covering the period from the birth of information technology (IT) to the rise of artificial intelligence (AI). High-ability, high-wage, and highly educated individuals in key technology hubs are more likely to become programmers. Creating software boosts both wages and career prospects of programmers, especially for those with specialized skills in AI and cybersecurity. These wage gains are concentrated among top ...
Working Paper
Fintech Innovations in Banking: Fintech Partnership and Default Rate on Bank Loans
We explore whether banks could leverage data and technology to expand their customer base without taking on more credit risk. Previous studies have not explored the impact of fintech partnerships on the quality of banks’ loan portfolios. Our analysis utilizes data on relevant bank– fintech partnerships and loan-level data from Y-14M reports. For credit cards, we find that banks that had fintech partnerships extended larger lines of credit to consumers with low credit scores or missing credit scores. We also find that credit card default rates declined among nonprime borrowers with missing ...
Working Paper
Artificial Intelligence Methods for Evaluating Global Trade Flows
International trade policies remain in the spotlight given the recent rethink on the benefits of globalization by major economies. Since trade critically affects employment, production, prices and wages, understanding and predicting future patterns of trade is a high-priority for decision making within and across countries. While traditional economic models aim to be reliable predictors, we consider the possibility that Artificial Intelligence (AI) techniques allow for better predictions and associations to inform policy decisions. Moreover, we outline contextual AI methods to decipher trade ...
Working Paper
The Rise of AI Pricing: Trends, Driving Forces, and Implications for Firm Performance
We document key stylized facts about the time-series trends and cross-sectional distributions AI pricing and study its implications for firm performance, both on average and in response to monetary policy shocks. We use the online job postings data from Lightcast to measure the adoption of AI pricing. We infer that a firm is adopting AI pricing if it posts a job that requires AI-related skills and contains the keyword “pricing.” At the aggregate level, the share of AI pricing jobs in all pricing jobs has increased more than tenfold since 2010. The rise of AI pricing jobs has been ...
Discussion Paper
Are Businesses Scaling Back Hiring Due to AI?
The swift advancement of artificial intelligence (AI) has sparked significant concern that this new technology will replace jobs and stifle hiring. To explore the effects of AI on employment, our August regional business surveys asked firms about their adoption of AI and if they had made any corresponding adjustments to their workforces. Businesses reported a notable increase in AI use over the past year, yet very few firms reported AI-induced layoffs. Indeed, for those already employed, our results indicate AI is more likely to result in retraining than job loss, similar to our findings from ...
Speech
Assessing the Balance of Risks in the Economy
Federal Reserve Bank of Boston President & CEO Susan M. Collins shared perspectives on the national economy, outlook, and monetary policy during an event hosted by the Greater Boston Chamber of Commerce entitled “Perspectives on the Economy: A Conversation with the Boston Fed President”. President Collins also joined Kimberly Sherman Stamler, president of Related Beal and a member of the Boston Fed’s board of directors, for a Q&A discussion.