Odd Lots · Friday, August 28, 2026
Austan Goolsbee discussed the dual impact of AI on the economy, noting that while it has the potential to increase productivity growth in the long run, the current build-out is causing significant investment and competition for resources, potentially leading to short-term overheating. He cited examples of data centers driving up land prices and competing for labor like electricians and HVAC technicians.
“But if the bigger the hype the more we're about to have a giant bounty that's going to come from technology you could easily overheat the economy in the short run and you have to raise the rates and we kind of live that through the mid to to late 90s.”
“And you hear it from business executives. But in some ways, I feel like maybe too much that if you look at the price pressures, coming from AI data centers, the build-out of very high investment. This isn't the first time that there's been high investment as an indicator of economic growth. But the overall overheating of the economy is kind of the deeper question.”
“The data centers are buying up all the land. They're driving up the prices. Nobody can construct, can do any construction. You can't get an HVAC person. So it doesn't feel like we're far from what is the sort of traditional excess demand and outputs above potential.”