Recent evidence for the US finds that higher AI job postings reduce municipal bond yields, particularly for longer-maturity and lower-rated bonds. This column shows that in five non-US OECD countries, expansions in AI job intensity are associated with higher bond yields. This suggests that bond markets are pricing the transition to an AI economy – with risks, timing, and institutional context – rather than its long-term potential. Policies to narrow the gap between the US and other OECD countries include procuring AI for augmentation rather than replacement, expanding pathways into AI-complementary roles, and improving fiscal pass-through and market transparency.
Published by Promoting Economic Pluralism
