Global stocks have stabilized since Britain’s decision to leave the European Union rocked major indices worldwide. But despite some calming, many investors are still worried that there’s more volatility to come.
As economic uncertainty lingers, it may be hard to pinpoint the root of the world’s problems today. However, Nobel Prize–winning economist Robert Shiller, who is the co-creator of the S&P/Case Shiller Index, has it figured out. He told Yahoo Finance’s Seana Smith in the video above that technology is to blame.
“People are worried about technology,” said Shiller. “It’s all of these amazing devices that are out there helping us—they’re great—but the benefits of them seem to go substantially toward a minority of wealthy people.” As a result, Shiller says advances in technology have led to “rising inequality.”
The subject of whether or not technology is helping or hurting the economy is hotly debated. And here’s why it’s ironic. While there’s little doubt that technology has helped drive economic growth in the US and worldwide, some say the progression of technology has made many jobs obsolete.
A report published by the World Economic Forum in January warned that by 2020, more than 5 million jobs in the world’s wealthiest nations could be lost as a result of disruptive labor market changes. A 2013 study by researchers at Oxford University speculated up to 47% of all jobs in the US are at risk of “computerization.”
And it’s a “problem” that will continue to persist. Let’s face it; technology isn’t going anywhere. “This is the problem, we’re not going back to the 1950s,” Shiller warns. “Technology keeps relentlessly moving forward.”
Shiller also said that economic uncertainty could force the Federal Reserve to leave rates near zero for “a really long time.”
“The economy is still weak. Unemployment looks all right but wages aren’t growing,” said Shiller. “The rest of the world is looking weak… It’s a matter of judgement, but if I were on the Federal Open Market Committee, I would want to wait until next year [to raise rates] and see how things go.”
The Federal Reserve on Wednesday voted 9-1 to leave US interest rates unchanged, although it did say that near-term risks to the US economy have diminished.