A new fiscal policy for a world of accelerated change and artificial intelligence

In the decade since the Great Recession, governments have used fiscal policy to prop up flagging domestic demand. This response has been considered appropriate because the shock was seen as temporary. But this attention to demand-side weaknesses may have distracted governments from attending to supply-side gaps that have been widening with the acceleration of technological change and artificial intelligence. Policymakers should start paying more attention to what's called structural fiscal policies, that is, changes in both public spending and tax collection to aid the expansion of the productive potential of economies. As laborsaving technologies flood the market, delays in doing this could mean that workers pay a stiff price, while consumers do not realize many of the benefits.