AI gains' distribution will shape inflation, ECB's Panetta says

MILAN, Sept 21 (Reuters) - ‌Central banks ​need ​to understand who benefits from artificial intelligence-driven gains, as their distribution ‌will help shape aggregate demand and ⁠inflation, European Central Bank Governing Council member Fabio ‌Panetta said on Monday.

• ‌AI is set to transform productivity and growth, labour and financial markets, and ​payment systems, Panetta said.

• If AI mainly creates new tasks and raises expected ⁠labour income, demand could increase before AI's full productivity ​benefits materialise, prolonging inflationary pressures, he added.

• Panetta, who is also governor ​of the Bank of Italy, ‌was speaking at an event hosted by the National Bank ⁠of Ukraine.

• Credibility is an essential asset of every central bank, but how it is ⁠built and preserved depends on the nature of the ​challenges faced, he said.

• Central banks cannot remain on the sidelines, Panetta said, adding that understanding ‌changes underway is increasingly essential to central bank credibility.

• According to ‌Panetta, if automation dominates, weaker consumption ⁠could cause the disinflationary ‌effects of ​AI to emerge sooner.

(Reporting by Sara Rossi; Editing Gianluca Semeraro and Jamie ‌Freed)

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