Harold Cole Stefano Cravero Jeremy Greenwood
The investment boom in artificial intelligence technologies has raised concerns about a potential bubble. This column argues that the 1920s boom and the Great Depression offer useful lessons. During the 1920s, process innovation grew rapidly, while product innovation stagnated. In turn, process innovation fuelled an investment boom based on an expectation of future demand. When this expectation failed to materialise, a sharp contraction followed. Thus, the optimism and prosperity of the Roaring Twenties help explain the onset of the Great Depression, and offer a cautionary tale for today’s artificial intelligence boom.
Πηγή: VoxEU