A decline was seen in the stock market after a research report by Citrini. The report claimed that a large number of white-collar jobs will be eliminated due to the increasing use of Artificial Intelligence (AI). It said that software engineers will become unemployed and start driving taxis, people’s spending power will decrease, house auctions will increase and ultimately there will be an economic crisis. The story may sound scary, but according to experts, its economic sense is wrong.
How will expenses decrease if income increases?
Other research (like Citadel’s study) shows that if new technology increases the country’s income or GDP, then people’s spending cannot suddenly reduce. Understand in simple language, when your income increases, you spend more and the standard of living improves. The same rule applies to the entire economy as well.
Experts believe that AI will definitely eliminate some jobs and change the way many tasks are done. Some people may also suffer loss. But if AI increases productivity, then both overall income and expenditure will increase. Therefore, they call the talk of a major economic recession due to AI an imaginary fear.
Why does bad news spread quickly?
Human nature is such that we pay more attention to bad news than good news. News of danger forces us to react immediately. This is the reason why scary reports related to AI got more discussion and the market fell.
However, there are some real dangers associated with AI. For example, despite the overall beneficial effect of social media, its negative impact has been seen, especially on the mental health of the youth. Even in education, AI can make it difficult to understand how much students are actually learning.
The battle of fear vs logic
Two types of thinking have emerged regarding AI. The first group believes that AI is different from other technologies and will eliminate jobs on a large scale. The second group considers it to be new technologies such as computers and the Internet, which eliminated some jobs but also created new jobs and improved living standards. Experts say that it is important to focus on logic rather than fear regarding AI. Whenever the market falls due to fear, investors should look for good investment opportunities.