[Key takeaways]
- The AI boom is driving a large, increasingly debt-financed investment surge and boosting trade and equity markets, generating sizeable terms-of-trade and wealth effects that differ across countries.
- The productivity payoff from AI, though potentially large, remains uncertain and uneven, across both sectors and countries.
- By simultaneously affecting demand and supply, AI blurs cyclical signals, complicating central banks‘ assessment of underlying economic conditions and monetary policy calibration.