Under a gradual adoption scenario, AI leads to strong productivity growth, comparable to or stronger than the late 1990s and early 2000s, some occupational displacement offset by new jobs, and real wages rise, while large widespread joblessness is avoided.
Source
Speech by Governor Barr on artificial intelligence and the labor marketOriginal Quote
Under a first scenario, AI proceeds like other general-purpose technologies, perhaps diffusing a bit faster. This leads to strong productivity growth, comparable to what we saw in the late 1990s and early 2000s, or maybe even stronger than that. As was the case during earlier technological advances, some occupations are displaced while new ones emerge, as AI is increasingly integrated into many existing roles. But AI adoption occurs gradually enough that large and widespread joblessness is avoided... With strong productivity growth, the economy can sustain faster output growth and real wages rise.
Outlook
OptimisticThis claim is classified as optimistic from the perspective of human welfare and broad societal or economic outcomes.
This scenario describes a gradual multi-decade technology diffusion process comparable to earlier general-purpose technologies; inferred as beyond 5 years.
Potential Data Sources for Validation
BLS TFP data, real wage growth indices, unemployment rate, and occupational employment shifts tracked over a 5-15 year period of AI diffusion.
About the Author
Michael S. Barr is a Governor of the Federal Reserve Board of Governors — and former Vice Chair for Supervision (2022–2025) — who is also a professor of law and public policy at the University of Michigan on leave, and previously served as Assistant Secretary of the Treasury for Financial Institutions under President Obama and as a key architect of the Dodd–Frank Act.
Across 18 tracked claims, Michael S. Barr skews neutral.