What Past Innovation Waves Tell Us About AI's Impact On Productivity And The Labor Market

By Seth B Carpenter, Morgan Stanley Chief Economist

Narratives on artificial intelligence range from unbridled optimism to fears of a disruptive force in labor markets, where jobs are shed far faster than they can be replaced. History, current data, and economic theory point to a more nuanced conclusion … with the ultimate verdict as yet unknown. We think of AI as the sixth major innovation wave since the Industrial Revolution.