Search Results
Discussion Paper
Firms and Artificial Intelligence: A Regional Update
Similar to past technological developments, the productivity implications, labor market implications, and thus economic implications of Artificial Intelligence (AI) will evolve over time. A lot depends on who is using AI tools, when they are using them, and how they are using them.In the Richmond Fed's December business surveys — which were fielded between Dec. 1 and Dec. 17 — we asked firms if they have adopted AI and if so, how they were using it. Businesses reported that they were increasingly providing employees with access to AI tools to complete tasks but were less likely to have ...
Report
How Retrainable Are AI-Exposed Workers?
We document the extent to which workers in AI-exposed occupations can successfully retrain for AI-intensive work. We assemble a new workforce development dataset spanning over 1.6 million job training participation spells from all U.S. Workforce Investment and Opportunity Act programs from 2012-2023 linked with occupational measures of AI exposure. Using earnings records observed before and after training, we compare high AI exposure trainees to a matched sample of similar workers who only received job search assistance. We find that AI-exposed workers have high earnings returns from training ...
Journal Article
Is Optimism for Artificial Intelligence Boosting Investment?
U.S. business spending related to artificial intelligence (AI) grew substantially in 2025 among publicly traded firms, which account for the bulk of overall investment. Analyzing sentiment data from quarterly company earnings calls can help infer current and evolving optimism towards AI. Public firm data show growth in capital spending and research and development funding has come entirely from the largest companies that are positive about AI. While market concentration among large firms raises some challenges, optimism measures suggest that AI investment will continue to contribute to future ...
Journal Article
AI-Powered Algorithmic Pricing and Monetary Policy
The business practice of adjusting prices using algorithms powered by artificial intelligence—known as AI pricing—has grown rapidly and spread across many sectors in the economy. Unlike traditional price setting, AI pricing uses predictive analysis of large data sets to incorporate real-time changes in supply and demand conditions into pricing decisions. This enables businesses to adjust prices more quickly in response to unexpected changes in market conditions and monetary policy. Industry-level evidence suggests that price adjustments are more sensitive to monetary policy in sectors ...
Journal Article
Have We Entered an Era of High Productivity Growth?
Labor productivity gains over the past three years helped the U.S. economy expand steadily, even with near-zero employment growth. Combined with substantially increased business investment in artificial intelligence technology, these conditions have raised the question of whether the economy is entering a high-productivity growth period. Two well-known productivity measures do not yet provide strong evidence of this shift. However, recent patterns resemble the mixed signals during the early stages of the 1990s productivity surge before a sustained high-growth period materialized, giving ...
Working Paper
Artificial Intelligence and Inflation Forecasts
We explore the ability of Large Language Models (LLMs) to produce in-sample conditional inflation forecasts during the 2019-2023 period. We use a leading LLM (Google AI's PaLM) to produce distributions of conditional forecasts at different horizons and compare these forecasts to those of a leading source, the Survey of Professional Forecasters (SPF). We find that LLM forecasts generate lower mean-squared errors overall in most years, and at almost all horizons. LLM forecasts exhibit slower reversion to the 2% inflation anchor.
Working Paper
Artificial Intelligence and Inflation Forecasts
We explore the ability of Large Language Models (LLMs) to produce conditional inflation forecasts during the 2019-2023 period. We use a leading LLM (Google AI's PaLM) to produce distributions of conditional forecasts at different horizons and compare these forecasts to those of a leading source, the Survey of Professional Forecasters (SPF). We find that LLM forecasts generate lower mean-squared errors overall in most years, and at almost all horizons. LLM forecasts exhibit slower reversion to the 2% inflation anchor. We argue that this method of generating forecasts is inexpensive and can be ...
Working Paper
Processing Power: The Effect of Data Centers on Wholesale Electricity Markets
Artificial-intelligence-driven data centers are reversing two decades of flat U.S. electricity demand and have generated questions about how this growth will impact electricity prices. We quantify this effect using an hourly, unit-level least-cost dispatch model covering wholesale electricity markets in the continental United States. We find that existing data centers have already increased wholesale prices by 3 to 5% on average nationwide, with substantially larger effects in regions hosting major data center corridors. Extending the model through 2028, we show that if proposed construction ...
Working Paper
Firm Data on AI
We present the first representative international data on firm-level AI use. We survey almost 6,000 CFOs, CEOs, and executives from stratified firm samples across the US, UK, Germany, and Australia. We find four key facts. First, around 70 percent of firms actively use AI, particularly younger, more productive firms. Second, while over two-thirds of top executives regularly use AI, their average use is only 1.5 hours a week, with one quarter reporting no AI use. Third, firms report little impact of AI over the last three years, with more than 80 percent of firms reporting no impact on either ...
Working Paper
Artificial Intelligence, Productivity, and the Workforce: Evidence from Corporate Executives
We use novel data from a survey of nearly 750 corporate executives to study the effects of artificial intelligence (AI) on productivity and the workforce. We document substantial heterogeneity in AI adoption across firms, with more than half having already invested, though many smaller firms are only beginning to do so. Labor productivity gains are positive, vary across sectors, and are expected to strengthen in 2026, with the largest effects concentrated in high-skill services and finance. These gains are not primarily driven by firms' capital deepening but instead reflect increases in ...