AI economic scenarios: Revolutionary growth, or recessionary bubble?

Schroders

Research

8 Pages

Schroders frames AI as a fork in the road for macro and markets: either productivity compounds fast, or a hype cycle breaks and drags sentiment and spending down. Instead of predicting a single path, they map two internally consistent stories and the second order effects on growth, inflation, policy, and market leadership. The provocation is simple: both outcomes can be plausible, depending on monetization and the policy response.

Date published: December 2025

Source: Schroders Economics Group. 6 November 2025. ¹Source: Monthly Treasury Statement. 

Key Takeaways

Scenario discipline: Competing narratives help investors separate macro impacts from market storytelling.
Monetization test: Adoption matters less than whether cash flows show up where expectations already live.
Policy feedback: Central bank reactions can amplify either boom conditions or bust dynamics through financial conditions.

Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week

Related Content

Scroll to Top