AI productivity gains won't solve inflation or make money irrelevant. While Elon Musk argues that AI-driven production could expand faster than money supply growth, enabling universal basic income without inflation, economic theory tells a different story. Issuing new money, regardless of productivity levels, redistributes claims on existing output rather than creating real income. Even in high-productivity environments, monetary expansion reallocates resources across sectors and can distort investment incentives. Relative prices, not just aggregate totals, determine how economies allocate goods and services. Simply printing money to fund transfers, even during periods of technological advancement, doesn't eliminate the fundamental economic problem of scarcity.
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