Trevor Chow explains the thesis behind AGI and the EMH: if people expect transformative AI to increase future income, they may borrow against that future and spend more today, while fear of misaligned AGI could produce a similar rush to consume. Both pathways would increase demand for present resources and push long-term real interest rates higher.
Trevor Chow says current bond yields may contain an early signal, but they remain far below what a market fully pricing transformative growth might show. His paper estimates that each percentage-point increase in growth could correspond to roughly 1.4 percentage points in real interest rates, while model releases, hyperscaler borrowing and sector-level hiring data provide additional imperfect indicators.
Trevor Chow argues that rates rising faster than GDP would prevent governments from simply growing out of their debt, even in an economic boom. The strain could be worse for emerging markets that face globally higher financing costs without capturing equal value from AI, making sovereign AI strategies, access to energy and other scarce physical resources increasingly important.
Watch on YouTube
