Economist: AI productivity dividends struggle to resolve fiscal dilemmas, may only be "buying time" for high-debt economies

On February 27, economists analyzed that even if productivity prosperity brought by artificial intelligence becomes a reality, it will be difficult to fundamentally solve the public finance dilemmas of major economies, but it may buy them more time for adjustments. OECD economist Filiz Unsal stated that if AI-driven productivity gains can boost employment growth, by 2036, debt levels in OECD countries like the United States, Germany, and Japan could decrease by 10 percentage points from current expectations — but this would still be significantly higher than current levels. Economist Idanna Appio, who previously worked at the New York Federal Reserve, pointed out that productivity improvements are like a “magic” that can greatly improve fiscal dynamics, but “our fiscal problems far exceed what productivity can fix.” The analysis suggests that population aging is the core challenge. Kevin Khang, head of global economic research at Vanguard, said that the root of debt lies in aging and related welfare expenditures, “solving this problem requires fiscal restructuring, and AI has only bought us time.” Additionally, there are still uncertainties in taxation and spending: if AI leads to job reductions or profits and capital gains benefit the most, fiscal revenue may fall short of expectations; if productivity increases push up wages in the private sector, government labor costs will also rise. Barclays warned that if an economic recession occurs before AI prosperity, markets may become nervous about fiscal trajectories in advance.