How Do Economists Think AI Will Impact The Economy? Forbes Reporter Explains

Added: 2026-06-02

[00:00:00]You've recently wrote a piece about AI in the economy and I'm sure you can relate to this, but whenever I've had a conversation in the past couple of years about AI, it's been a real mixed bag.

[00:00:10]Some people are really excited about AI and the potential possibilities it could unlock both professionally and personally. Other people are a bit more apprehensive. They have some real existential concerns when it comes to AI or there's real palpable fears. People thinking, "Hey, is AI going to steal my job?" But you recently wrote that AI has the potential to disrupt the way that we view recessions. But before we get into how, I do want to zoom out just a little bit because the United States has been through a handful of recessions from the 1950s onward. So first, talk to us about how those have followed the same pattern.

[00:00:51]>> Yeah, so typically, you know, the the rule of thumb for judging recessions is two consecutive quarters of falling GDP.

[00:01:00]That's not like perfect. There's wiggle room. It it's up to a committee to decide, the National Bureau of Economic Research.

[00:01:08]But generally, if that's if you were going to say like, "Hey, we're heading into a recession." That's like the one indicator you can look at. There's been a couple like There was one in 2001 around the tech boom where we didn't quite have that, but they still called it a recession because they have a more holistic look at it.

[00:01:30]But that's it's sort of rare. Like that should happen in a recession. We usually don't see gross domestic product going up and we're saying, "Oh, the economy's bad."

[00:01:40]Like it just it wouldn't naturally make sense.

[00:01:44]>> And then now you're saying something has changed. AI, you're saying, will change the way we can see what a recession actually looks like. Talk to us a little bit about that.

[00:01:56]>> Yeah, so I think there's two things here is one, you know, we have a chart in the story just laying out when recessions have happened since 1950.

[00:02:05]And if all you look at is the space between the shaded gray bars, and I I hope they're gray. I'm color blind, so >> [laughter] >> Hope that Hope that's what it was.

[00:02:13]That's what I intended. Um but if you just look at the spacing between them, typically we've had a recession every five to six years since 1950.

[00:02:22]But what we've had since the Great Recession 2008-2010 span is you minus the little tiny minuscule barely happened COVID recession, uh we've basically gone 16 years without one. So that predates AI. So there's something here where it's like either it's just an odd thing that happened. There's no reason it should happen every five to six years, but that's been the trend. We haven't had that for, you know, going on two decades now.

[00:02:54]So something changed prior to AI, and we can all guess what that could have been. It could have been that 2008, you know, was so horrific that it washed things from the system and gave us a longer time to run.

[00:03:08]We could say it's part of QE and money printing and just a flood of liquidity in the system that has, you know, propelled things.

[00:03:17]Could be technological advancements pre-AI, you know, a focus more on software, you know, technology stocks taking the lead in all of the indexes.

[00:03:28]Uh but what I'm trying to say in this article is like there's another thing here that's quite obviously happening, which is AI coming into the picture.

[00:03:37]And that could, you know, make this pattern that we've already seen, you know, extend it longer than it might might normally have gone.

[00:03:46]>> How are economists viewing this? Because I do want to quote you in your piece.

[00:03:51]You say this, "Economists may soon face a strange problem. Businesses grow, GDP rises, profits stay strong, but the jobs don't come along for the ride. If AI allows companies to produce more with fewer workers, America could end up looking richer on paper while millions of households feel poorer in real life."

[00:04:10]How are economists viewing this moment right now?

[00:04:14]>> Yeah, my impression from talking to quite a few is that it's kind of the same split that you'll get talking, you know, talking with friends and family, you know?

[00:04:25]Um, you have some that basically kind of take the approach of like, "Hey, look, AI is new, but the idea of a new technology coming in and disrupting things and kind of changing the picture isn't new. And historically, we've seen this happen and you have job losses, at least initially, but you gain them back somewhere else. It's just a reordering. These things don't happen simultaneously, but it follows a natural progression."

[00:04:55]And then there's other people that are saying like, "No, wait. This really is a sea change. This is going to change things overall and we shouldn't trust historical patterns."

[00:05:05]So, I think there's this internal debate right now of like, I don't get the sense everyone anyone's like really overreacting to it.

[00:05:13]But, I think there is a healthy debate going on of like, the door's at least open, I think in minds that maybe it wouldn't have been before that like AI could really break that historical paradigm.

[00:05:29]>> You noted in your piece that before in past recessions, like we talked about from the '50s to 2008-2009, there were those indicators like we said, and the economy looked sick because the economy was sick. Now, it's not looking sick, but if you go to any person in America, the majority of people don't feel good about the economy, right? It doesn't pass this vibe check. People feel pessimistic about the economy administration's handling of it. It's not unique to Trump. I cover mostly politics, and when President Biden was president, people didn't like the way he was handling the economy, either. People feel really pessimistic about their financial outlook. People don't feel good about the way that their pocketbook looks now, how their wallet looks now, especially compared to years prior. So, when you're thinking about vibes of the economy, how much do you think that's going to play a factor here?

[00:06:28]>> Yeah, that's an interesting question. I mean, I think it could to some degree, so long as it's substantiated, right?

[00:06:35]And so, the idea that we have a K-shaped economy now, I think it's pretty well accepted. I mean, that's particularly coming out of a and maybe going back into a high inflationary period, where uh you know, people's paychecks just aren't keeping up with rising costs.

[00:06:51]So, I think so like so long as the vibes match some sort of realistic stat, um it's going to factor in, and and I think economists have been pointing to this. I mean, the you know, the term vibe session has become almost like a standard talking point, even in academia.

[00:07:12]Um but K-shaped economy is certainly I mean, you can go to um the Social um Sciences Research Network, SSRN, do a topic check, type in K-shaped economy, and you're going to start getting papers um that talk about this phenomenon.

[00:07:27]>> You said