This can just be an artifact of how GDP is calculated—it’s really hard for real global GDP to change significantly in a single year. Imagine the following toy scenario:
AI causes all goods except housing to be so cheap they’re essentially free.
The government prints money, to give everyone UBI.
All this money is spent entirely on housing, pushing house prices up.
The nominal GDP is proportional to the value of all goods and services in the economy = value of housing = UBI. So will go up or down depending on the amount of money printed.
Inflation is calculated based on historical usage. The decrease in cost of goods is offset by the increase in cost of housing. Whether it goes down or up again depends on size of UBI.
The two cancel out, leaving real GDP basically unchanged.
This can just be an artifact of how GDP is calculated—it’s really hard for real global GDP to change significantly in a single year. Imagine the following toy scenario:
AI causes all goods except housing to be so cheap they’re essentially free.
The government prints money, to give everyone UBI.
All this money is spent entirely on housing, pushing house prices up.
The nominal GDP is proportional to the value of all goods and services in the economy = value of housing = UBI. So will go up or down depending on the amount of money printed.
Inflation is calculated based on historical usage. The decrease in cost of goods is offset by the increase in cost of housing. Whether it goes down or up again depends on size of UBI.
The two cancel out, leaving real GDP basically unchanged.
(Relatedly)