Banking giant JPMorgan believes that artificial intelligence is more than just a growth theme, noting it may be the key force holding the global economy together as structural pressures build.
In a new episode of the bank’s Alternative Realities podcast, David Lebovitz, global strategist on JPMorgan Asset Management’s Multi-Asset Solutions team, names three powerful themes that will collide in the next 10 to 15 years.
“When we look at what’s happening in the world today, we’re seeing economic nationalism continue to rise. So the idea is that governments are focused more on their own backyard than they are on their neighbors. We continue to see this kind of fiscal activism and a much greater appetite for fiscal spending than certainly was the case in places like Europe following the financial crisis. And then we also view kind of technology investment and adoption, and obviously a lot of that is tied to AI, as being a central theme as well.”
According to Lebovitz, economic nationalism serves as a headwind, while fiscal activism acts as a double-edged sword.
“Because investment spending can be good, but too much money chasing too few goods can also lead to inflation and higher volatility of inflation. And so we think that [fiscal activism] is somewhere in the middle.”
As for AI, the strategist says the development and widespread adoption of the technology could serve as a powerful counterweight for the other two themes.
“The antidote to all of this, to less labor supply, to inflation that is getting pushed up from the bottom as opposed to down from the top, really lies in this theme of technology adoption, investment, and deployment. And the idea that as we focus more on things like artificial intelligence, it will provide a meaningful boost to productivity growth over time, helping to offset some of that inflationary pressure and helping to offset some of the other forces that are weighing on our growth forecasts over the next 10 to 15 years.”
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