Moody's Talks - Inside Economics Alan Blinder’s Wile E. Coyote Moment
Nov 21, 2025
Alan Blinder, a renowned economics professor and former Vice Chair of the Federal Reserve, shares his insights on various pressing topics. He explores the potential of AI to drive unexpected GDP growth while warning of a bubble in equity markets reminiscent of the Wile E. Coyote metaphor, highlighting the unpredictability of market crashes. Blinder also discusses the implications of AI on job displacement, education reforms, and the risks to Federal Reserve independence amid political pressures. His thoughts on immigration policy further underline critical labor shortages.
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AI Investment Fuels This Year’s Growth
- AI investment has driven stronger-than-expected GDP growth this year through data centers, chips, and related CapEx.
- That investment is highly concentrated among a dozen firms and may be unsustainably large.
Big Tech Booms Usually Include A Bubble
- Major technological revolutions often spawn bubbles where many firms fail despite a real underlying innovation.
- History (autos, radio, PCs) shows transformative tech plus exuberant investment usually creates a speculative bubble.
Buying A TRS-80 Illustrates Survivor Bias
- Alan recounts buying a Radio Shack TRS-80 in 1980 to illustrate how many early PC firms failed.
- That personal example shows transformative tech often leaves only a few survivors like Apple.
