2026 Economic Report of the President

The last 25 years have seen a great convergence as the world’s richest nations have grown more slowly than many developing nations. However, the advent of generative AI, based on large language models, will initiate a new wave of profound economic transformation in the United States, promising significant boosts to productivity and growth. As AI technologies become more integrated into the workplace, economists are reevaluating long-term projections for GDP. Yet this period of innovation is not without its complexities. This chapter focuses on the long-term analysis of structural trends, because not every AI-related investment will be profitable, and the short run always contains the potential for substantial volatility.