Warsh set to face early reality check as Trump's man at the Fed Kevin Warsh has pledged to shrink the Fed's balance sheet and argued that a productivity boom driven by artificial intelligence will keep inflation low. Kevin Warsh waited almost a decade before finally clinching U.S. President Donald Trump's nomination to be chair of the Federal Reserve. He won't need to wait as long before his first big test in the job. Having won the race with a promise of regime change" at the Fed, suggesting he would make significant changes, Warsh has pledged to shrink the Fed's balance sheet and argued that a productivity boom driven by artificial intelligence will keep inflation low. While that prognosis was enough to convince Trump, his Fed pick will now need to convince fellow policymakers and investors.

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The ChatGPT revolution opens the door to a four-day work week by providing a major productivity boost for swathes of jobs, according to a Nobel Prize-winning labor economist. Christopher Pissarides--a professor at the London School of Economics who specializes in the impact of automation on work--said the labor market can adapt quickly enough to artificial intelligence-backed chatbots. His remark may tamp down concerns that rapid advances in technology could bring mass job losses. "I'm very optimistic that we could increase productivity," he said in an interview at a conference in Glasgow. "We could increase our well-being generally from work and we could take off more leisure. We could move to a four-day week easily."

Among the trials and tribulations of the plague years, there was a silver lining. In late 2020, with the approval of covid-19 vaccines, and into 2021, as the jabs worked their magic, techno-optimism began to spread. If people could develop life-saving inoculations in months, why couldn't the world move out of its low-growth, low-productivity slumber? Firms could embrace digitisation as never before; the shift to working from home could allow people, free of office gossip and draining commutes, to work more effectively; before long there would be vaccines for every disease imaginable. Governments promised to spend big on science; companies outlined juicy r&d plans.

Some companies are also finding ways to harness machine learning. Even pre-pandemic, companies were automating scheduling and various administrative tasks. Now more sophisticated work is being done increasingly by machines. Last month, California software company Cadence Design Systems unveiled a new software they dubbed Cerebrus, a homage to the largest part of the human brain. It's used to make microchip engineers more productive.

The last 15 years have brought what Stanford University professor Erik Brynjolfsson calls the "productivity paradox." While there's been continuing advances in technology, such as artificial intelligence, automation, and teleconferencing tools, the U.S. and other countries have seen flagging productivity. But a productivity boom is coming soon, Brynjolfsson said at the recent EmTech Next conference hosted by MIT Technology Review. He pointed to advances in technology, particularly artificial intelligence programs that are as good as -- or better -- than humans at some things. Businesses should now focus on incorporating the technology into work processes and preparing employees, he said, and policymakers should make sure its adoption doesn't contribute to inequality.