Will AI save the day? Don’t count on it

News Snapshot:

Will artificial intelligence have a dampening effect on inflation and interest rates, and a positive effect on productivity and profit margins? Let’s just say we shouldn’t count on it saving the day. The past 30 years witnessed the advent of globalization, the admission of China to the World Trade Organization, cheap labour, lower taxes, weakening labour union negotiating power and increased global trade. Inflation and interest rates declined and corporate profit margins rose sharply. Profit margins for S&P 500 companies increased from 6 per cent in 2000 to about 10 per cent in 2019. Profit margins and stock prices are...