It’s not inflation or recession that has blindsided traditional macroeconomists, but irrelevance. Artificial intelligence has not just transformed markets but made our dominant frameworks for understanding them obsolete.

For over a century, macroeconomics has relied on tools honed in the industrial age: GDP to measure growth, yield curves to signal recessions, and productivity metrics built around physical goods. But we now live in an economy increasingly defined by the immaterial: algorithms, platforms, synthetic data, and code. 

In this world, value creation escapes the radar of traditional statistics, and policy decisions made on outdated dashboards risk steering blind. Even before the advent of generative AI, prominent economists such as Erik Brynjolfsson had proposed GDP B, a second measure of GDP to include all the real benefits and free goods or services we were getting from the digital revolution. With their antiquated tools, economists kept on complaining that they could not see any productivity uptick from the........

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