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Beretta_2025_TaylorAndFrancis_09538259.2025.2562206
Journal article

AI-based forecasting and market expectations : a self-fulfilling prophecy?

  • Beretta, Edoardo ORCID Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera - Franklin University Switzerland, Lugano-Sorengo, Svizzera
  • Dianova, Vera ORCID Franklin University Switzerland, Lugano-Sorengo, Svizzera
  • Pankratz, Giselher University of Applied Sciences of the Deutsche Bundesbank, Hachenburg, Germany
  • Schollmeyer, Uwe University of Applied Sciences of the Deutsche Bundesbank, Hachenburg, Germany
  • 2025
Published in:
  • Review of Political Economy. - 2025, p. 1-16
Artificial intelligence (AI)
Central banks
Market expectations
Monetary policy
Self-fulfilling prophecy
English The European Union has been a pioneer in creating a comprehensive legal framework on artificial intelligence (AI). However, some nuanced risks of advancing technologies may be easily overseen. In this research note, we consider the possible impact of accessible AI on the formation of monetary policy expectations and evaluate the implications for monetary policy implementation by central banks. We offer a conceptual model of AI-driven self-fulfilling economic prophecies and discuss eight strategies that central banks may adopt in response to these dynamics. Central banks may face significant challenges in adapting monetary policy frameworks to broad-based AI-driven forecasting, but the rapid pace of technological evolution suggests this task should be a priority.
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Language
  • English
Classification
Economics
License
CC BY-NC-ND
Open access status
hybrid
Identifiers
Persistent URL
https://n2t.net/ark:/12658/srd1334718
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