Episode
The AI Divide Between the U.S. and Japan
- Podcast
- Thoughts on the Market
- Published
- Jul 9, 2026
- Duration seconds
- 667
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Summary
Robert Feldman and Michael Gapen discuss how AI could reshape growth, labor markets and productivity in the U.S. and Japan. Read more insights from Morgan Stanley. ----- Transcript ----- Robert Feldman: Welcome to Thoughts on the Market. I'm Robert Feldman, Senior Advisor at Morgan Stanley MUFG Securities in Tokyo. Michael Gapen: And I'm Michael Gapen, Morgan Stanley's Chief U.S. Economist. Robert Feldman: Today, we'll discuss why the U.S. and Japanese economies may react differently to the AI productivity test. It's Thursday, July 9th at 8 pm in Tokyo. Michael Gapen: And 9 am in New York. Robert Feldman: AI is the biggest theme around the world right now, but AI will play out differently in different economies. Take the cases of the U.S. and Japan. In the U.S., it's already a catalyst in investment, imports, productivity, and the labor market outlook. But here in Japan, it's seen as a savior for an economy with an intense labor shortage, low unemployment, and very little room to raise labor force participation. Mike, in the U.S., AI's contribution to real GDP growth will rise from about 0.05 percentage points in 2024 to an estimated 0.43 percentage points in 2027. What does that mean for markets? Michael Gapen: Well, Robby, I think it, it means a number of things, but, you know, I'm an economist, so the answer is always, "It depends." I think the real crux of the issue over time in the U.S., and therefore what it means for financial markets, is ultimately whether AI is labor replacing – and pushes the unemployment rate higher. Or it acts like a more traditional general-purpose technology that's labor augmenting. So, if, that's the case, meaning it looks similar to the internet and digital era, then it would m…