RESEARCH · GLOBAL
arXiv: Inference-Cost Phillips Curve—AI costs driving inflation dynamics
Economists introduce the Inference-Cost Phillips Curve (ICPC), extending monetary theory to account for AI inference costs as a driver of firm-level inflation. Proves how falling GPU costs pass through to lower product prices and inflation.
WHY IT MATTERS
Central banks (Fed, ECB, RBI) must factor AI inference cost deflation into monetary policy; BFSI risk models should incorporate AI-driven margin compression into inflation forecasts and pricing strategies for loans, deposits, advisory fees.
Source: arXiv · 2026-05-21