While the stock market was shaken by predictions that AI disruption could lead to a depression, Bank of America Securities economists Claudio Irigoyen and Antonio Gabriel wrote that technological change tends to generate new industries even as it displaces older ones, according to the report.
If AI delivers a major productivity boost, it will increase total output even if labor’s share of income declines, per the report. In addition, displaced workers will move into new roles and business opportunities that used to be unviable will become profitable, as happened when the share of U.S. employment accounted for by agriculture dropped from 40% in the early 1900s to 1% today, according to the report.
“Despite short-term disruptions, the economy will create new jobs that are even difficult to foresee at this point,” Irigoyen and Gabriel wrote, per the report.
This report came days after Citrini Research’s Feb. 22 Substack essay “The 2028 Global Intelligence Crisis” contributed to a $300 billion sell-off as investors reacted the firm’s hypothetical scenario in which agentic AI sharply reduces the value of white-collar labor, pushes unemployment above 10% and drives a 38% drawdown in the S&P 500 from 2026 highs.
The Citrini Research memo rests on the central assumptions that agentic AI will sharply reduce white-collar employment and that this displacement will occur fast enough to weaken consumption before new jobs or policy responses stabilize demand.
It was reported Tuesday (Feb. 24) that a White House economist said the Citrini Research report “violates some of the basic accounting in economics.”
Pierre Yared, the acting chair of the White House Council of Economic Advisers, told Bloomberg: “AI can either be groundbreaking innovation that increases production, increases income” and expenditure, “or it can be an innovation that end up not delivering on its promise.”
The Wall Street Journal reported Feb. 24 that AI-related fears have led investors and dealmakers to expect that a handful of large initial public offerings will dominate 2026, with most private tech companies being left waiting.