Tiff Macklem: Artificial intelligence, the economy and central banking

Remarks by Mr Tiff Macklem, Governor of the Bank of Canada, at the National Bureau of Economic Research, Economics of Artificial Intelligence Conference, Toronto, Ontario, 20 September 2024.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Around the world, digitalization is pulling economies in new directions. Artificial intelligence (AI)-and particularly its offspring, generative AI (GenAI)-are accelerating this pull. It's still early days, but AI is already disrupting existing industries and creating new ones.

How AI will affect the global economy-and indeed humanity-is on all our minds. It's easy to find enthusiasts who say AI will take us to a land of plenty. But it's also easy to find doomsayers who say we are headed for a bleak world with a few big winners and many more have-nots.

Be wary of anyone who claims to know where AI will take us. There is too much uncertainty to be confident. We don't know how quickly AI will continue to advance. And we don't know the timing and extent of its economic and social impacts.

But that doesn't mean we can't gain insights into what could happen. The past is still a useful starting point. The laws of economics still matter. People will still respond to incentives-and that includes prices. As central bankers, we care a lot about prices. It's in our mandates to keep price inflation low and stable.

So what does the latest wave of AI, and more broadly, ongoing digitalization, mean for what we do at the Bank of Canada? There are two broad elements. First, we need to better understand how AI will affect workers, consumers, the economy and inflation. And second, we need to use AI ourselves to best deliver on our mandate for Canadians.