Why Robots Mean Interest Rates Could Go Even Lower In The Future

If robots rise, interest rates will fall. That was the assumption of delegates at the World Economic Forum’s annual meeting in Davos, Switzerland, as revolutions in automation and artificial intelligence reshape how economies work. The argument goes like this: As machines become more and more advanced, many workers will lose their jobs and others will see their wages fall. New technology will also increase the chances of a 1990s-style jump in productivity. Those forces will combine to restrain prices across the world economy, meaning that the era of slow inflation now challenging central bankers may only prove a sign of things to come. “Technological progress will put a lid on how inflation can re-emerge,” Axel Weber, chairman of UBS Group AG and a former president of Germany’s Bundesbank, said in…


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