Can Ai “Sorcery” solve the “productivity” that has swept the economy for 25 years? Change the sea Shakespeare under the foot

Full disclosure: The author’s brother is a prominent Shakespeare scientist, often Quoted in New York TimesAlthough it was not before luckThus, I asked him to explain the meaning of this term in particular. “Near the end of his career,” Drew Lentburg Subordinate Shakespeare Theater Company In Washington, DC, he said in a statement to luck“Shakespeare began writing plays that challenge the type with sudden and miraculous changes to wealth.” Shakespeare used the phrase “sea change” to describe “a magic storm in the sea that has the ability to get rid of life or restore it in less than a second.”

Shakespeare’s relationship with miraculous changes in luck, well, luck? Bank of America’s Institute presented “Sea change” in the economy. He sees a pivotal shift in workers’ productivity in the largest companies in America, driven by lessons from postpartum enlargement and charged by a wave of artificial intelligence and automation. The institute’s work along with expectations from Bank of America Research to show the re -connection of the primary scene of the evaluation of the S&P 500 index, with deep repercussions of investors and the “United States’s quality bonus” traditionally.

luck I spoke to the Bofa Research President about stocks and quantum strategy, Savita Subramanian, to dig into this change, and perhaps to something rich and strange. She said she is not completely mysterious, but she still thinks it is a big problem.

Finally, increased production?

Subramanian explained that what her team expected is not exciting or dramatic like the presence of actual treatments working in economics gears. She says that the most disgusting vision is that the combination of artificial intelligence technique with lessons learned from the inflation wave in 2020 means that workers’ productivity finally shows signs of the increase. This is the change of the sea.

In her heart, her work revolves around the famous “productivity paradox” that Robert Solo, a Nobel Prize -winning economist. “You can see a computer age everywhere but in productivity statistics,” He said in 1987Long before the productivity crisis in the twenty -first century. luckJeremy was They have discussed that workers still do not seem more productive despite the new techniques at their disposal. In reality, Chris White and Olivia White argued with McKinsey In 2024, this productivity was bleak for nearly a generation, hovering about 1 % a year, with a decline after the major financial crisis. Subramanian agrees, his saying luck If you look at productivity measures, “they have not improved all of this since 2001.”

Supernamine Written on August 8 The ultimate goal of spending the huge artificial intelligence that extends across the economy is “changing the sea” in the scope and scope of efficiency gains-this productivity plane is already ongoing. She added that the inflation after childbirth forced companies to “do more with fewer people”, and now from artificial intelligence tools to reach this fissure.

But official statistics do not show a complete understanding of how to do productivity, according to Subramanian. So, Bofa got sales and modified them for inflation, then sales were divided into the number of people working in the S&P 500 companies, which show real growth in sales against the number of people, and what you described as a “decent agent” for the producer, “because if you are a producer, you do things more efficiently, then you need to efficiently efficiently efficient than anything else.”

Look at what you found.

This means that companies learn to do more with less, and this is a kind of magic. Companies had to do more difficult to generate profits and maintain healthy margins, and often by replacing their members with operations. “The process is almost free and can be repeated to eternity,” she said, adding that she believes that this is why companies that make efficiency gains tend to excel. It is not only about Amnesty International Workers, but a fundamental shift in how to do business.

“It seems like magic”

She said this discussion may seem more boring than the storm and the processor, but there is something supernatural around the current moment. She said, “I think people love artificial intelligence technology because it looks like magic,” before she added: “The truth is that it has not changed the world much yet, but I do not think it is something that must be rejected.”

In general, Subramanian discovered that the S&P 500 has turned from its model in the eighties of the extensive manufacturing of assets and employment to the innovation of assets and employment, which are technical care and health care companies. It shows its work, and it calculates that the S&P 500 companies with a focus on innovation are measured by high search and development expenses, and trade in higher complications from 29x front profits per share. More dense capital manufacturers, on the other hand, trading 21x complications. She wrote that the current artificial intelligence boom is actually a little risky, because the huge data center investments represent a shift from the foundations of assets to focus on assets.

Bofa certainly finds that S&P 500 is now statistically expensive on 19 out of 20 measures that follow, including P/E, price to reservation, price to cash flow, and CAP/GDP market. This is where the sea changes, because if the shift from manufacturing to innovation is real, the assessments must also turn. Hence the “Innovation Premium” from Bofa research.

except TimingSubramanian talks about other members of “Seven Magnificent” as evidence that companies lose some of their installments as a result of the shift towards the principles of assets. Lassine of stocks, Microsoftand Googleand Amazonand Deadand Nafidia Apple’s average return (i.e. shares in addition to net purchase operations) has decreased by more than 1 % since 2015.

She said that there are other transformations on an equal footing luck. “We seem to stop at least temporarily on this theme of globalization,” she said, noting that China’s recognition of the World Trade Organization in 2001 as a large engine to expand margin, allows to reduce costs as a huge lever to maintain margins. (It was also the year in which the productivity of workers was frozen in its paths.)

In the globalization system, “you didn’t have to think about making money and expanding your halls,” she said. It was “very easy and revenge for companies to buy things from different places and have costs. It has also been martyred in the low -interest environment that has continued in most of the past few decades, allowing many “financial engineering”.

For example, Subramanian said it is common to see companies that know that they will lose their profit estimates that suggest money and buy stocks to reach their goals, adding that “there are good reasons for re -purchasing shares and bad reasons for the re -purchases of shares.” All this “created a lot of strange behavior.”

Warren Buffett’s passion has long been subjected to shares re -purchases for other investors, with Jeremy Granteham Writing in 2023 it facilitates the manipulation of stocks and must be illegal. Bofa research was found in July 2025However, the re -purchases of shares have slowed down a little, albeit high residues with historical standards.

She added that the situation is now more difficult in many ways, but companies are unable to engineer financially in the growth of profits. Now this is a sea change.

A final note on the romances of Shakespeare, from Drew Lestenburg: that name came in the late eighteenth century, that is, nearly two centuries of Shakespeare’s life, with the birth of the romantic movement. The word “romance” was present before, but it had no current meanings until it was raised by Samuel Taylor Colleridge to mean something that links it directly to the nature and divine genius of self -expression. This was largely a response to the high mind and logic in enlightenment and its final achievement: the industrial revolution that launched modern capitalism at the world. Sea change, in fact.