BIS paper models AI productivity's impact on growth and labor share, contrasting with Bitwise's optimistic view

While Bitwise CIO Matt Hougan argued in an Oct. 14 memo that nearly every macroeconomic path leads to higher Bitcoin value, including an AI productivity boom, the Bank for International Settlements (BIS) Working Paper No. 1381 models a fourth path where AI automation thins consumer demand, causing growth to fade. In the calibrated scenario, consumption's share of output falls from about 69% to 62.1%, leading to a long-run sustainable growth drop from a 2% pre-AI baseline to about 1.6%. Furthermore, the model estimates labor's share of tasks falls from 60% to 15%-50% over three decades, resulting in real wages settling about 15% below the pre-automation path.