Warning: scammers may call, email or message you on behalf of DNB. We are also aware of online videos and images – for example, of our current or former governor – that look genuine but are definitely fake. Don’t be taken in! DNB will never ask you for money or confidential information. Read more

Do Markets Dream of Artificial Intelligence? Macroeconomic Effects and International Spillovers of AI News Shocks

Working paper 871
Working Papers
Read aloud

Published: 01 October 2026

By: Maria Sole Pagliari

This paper identifies AI news shocks from financial markets and traces their macroe-conomic effects in the United States and the euro area. We combine a daily equity factor based on differences in firms’ AI exposures with sign, magnitude, and narrative restrictions in a Bayesian VAR to isolate revisions in AI’s expected economic value. Monthly local projections reveal an investment-led adjustment in the US: capital-goods orders rise early and persistently, while aggregate activity responds more gradually and with greater uncertainty. Producer prices increase before consumer prices, and the expansion spreads from sectors closely connected to the AI production network to the broader economy. In the euro area, equity prices rise and the euro depreciates; import and energy costs feed into inflation before real activity strengthens. Inflation expectations and nominal rates also increase. The results highlight a monetary policy dilemma: financial spillovers and imported price pressures arrive before the broader productive gains from AI adoption.

Keywords: AI news shocks; macroeconomic dynamics; international spillovers; pro-duction networks
JEL codes C32;E32; E44; F41; O33

Working paper no. 871

871 - Do Markets Dream of Artificial Intelligence? Macroeconomic Effects and International Spillovers of AI News Shocks

16.4MB PDF
Download 871 - Do Markets Dream of Artificial Intelligence? Macroeconomic Effects and International Spillovers of AI News Shocks

Research highligts

  • Relative equity-market movements help identify AI-related news and distinguish it from broader financial shocks.

  • In the United States, positive AI news shocks are followed by an early rise in capital-goods orders, while broader real activity responds more gradually.

  • Producer prices increase before consumer prices, suggesting that investment and resource-demand pressures emerge before the broader productive effects of AI.

  • The effects are initially concentrated in sectors more closely connected to the AI production network and subsequently spread to the wider economy.

  • US AI news shocks also generate euro area spillovers: financial variables and external price pressures adjust before domestic real activity strengthens.

Discover related articles