AI-driven productivity gains are widely expected to ease advanced economies’ fiscal strains through higher tax revenues. But shifts in income distribution, rising spending pressures, labour disruption, weak regulation and geopolitical risks suggest deficits may prove harder, not easier, to contain
AI-driven productivity gains are widely expected to ease advanced economies’ fiscal strains through higher tax revenues. But shifts in income distribution, rising spending pressures, labour disruption, weak regulation and geopolitical risks suggest deficits may prove harder, not easier, to contain
By Kenneth Rogoff, Former Chief Economist, International Monetary Fund
August 19, 2026
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