The flattening of the Phillips curve, accelerated by the integration of AI and robotics into the workforce, represents a fundamental disruption of economic orthodoxy. As machines replace human workers across industries, the traditional relationship between unemployment and inflation is eroding, rendering conventional monetary policy tools ineffective.
The implications extend beyond dry economic theory. As automation reshapes the labor market, our very conceptions of work, productivity, and social value are called into question. For example, large swaths of the education system, still largely geared towards preparing workers for a human-dominated job market, faces obsolescence.
These changes are not merely challenging—they are potentially destabilizing. The flattening Phillips curve is a harbinger of profound economic and social upheaval. Our economic frameworks, developed in and for a world where human labor was paramount, are increasingly misaligned with the realities of an automated economy.
This large study of 187k developers using GitHub Copilot finds AI transforms nature of coding.
— Ethan Mollick (@emollick) July 10, 2025
Coders focus: more coding & less management. They need to coordinate less, working with fewer people
They experiment more with new languages, which would increase earnings $1,683/year pic.twitter.com/UN62E7Hmem