One Decision Will AI Upend The Global Economy?
Nov 13, 2025
In this engaging discussion, renowned economist Mohamed El-Erian delves into the transformative impact of AI on the global economy. He explores the dual outcomes of AI—significant productivity gains versus potential fragmentation. El-Erian also tackles pressing geo-economic issues, including the risks to the US dollar's dominance and the implications of Trump's tariff policies. He advocates for a thoughtful approach to universal basic income in the face of automation while emphasizing the need for international cooperation on AI regulation.
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Tariffs Are Rewiring The Global Economy
- Trump-era tariffs have not crashed growth but are rewiring global economic relationships and creating persistent uncertainty.
- This rewiring combines macro trade shifts with micro-level changes from AI, making outcomes early and unpredictable.
AI Diffusion Determines Global Outcomes
- If AI advances and diffuses, the global economy can get a major productivity surge but distribution will be uneven.
- If diffusion fails, high debt, inequality and fragmentation prevail instead of growth.
Act To Turn AI Promise Into Broad Gains
- Prioritize diffusion, retraining, and corporate mindsets that enhance rather than displace labor to capture AI's gains.
- Also act to limit bad actors and manage the financial side of AI investment.