AI may prove disinflationary because agents can negotiate contracts and deals to make your life cheaper, says top economist

Economists are divided on the extent to which artificial intelligence will prove disinflationary—and when. On the one hand, AI capital expenditure (capex) is driving massive demand for finite resources and skills, thereby pushing up prices. On the other hand, AI’s productivity benefits could increase efficiency, bringing down costs in the longer term. Professor Jeremy Siegel, an emeritus professor of finance at The Wharton School of the University of Pennsylvania, has a further theory: AI could help address the affordability crisis through agents tasked with making consumers’ lives cheaper.While AI and data centers aren’t hugely popular at present, any assistance in bringing down the cost of living is likely to be welcomed. Currently, U.S. consumers face inflation levels of 3.4%, according to the latest data from the Bureau of Labor Statistics. That is significantly ahead of the Federal Reserve’s 2% target, which hiked the U.S. base interest rate this month as a result.

Affordability is also top-of-mind for voters in the run-up to midterms: A July study from Pew Research showed the economy was the most important issue for........

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