Economics Explored

The AI Boom: Innovation or Irrational Exuberance? w/ Aman Verjee - ep301

Episode Summary

Venture capitalist Aman Verjee joins Gene Tunny to explore whether artificial intelligence is fuelling the next great economic bubble. Drawing lessons from history—from the 1840s railway boom to the 1990s dot-com surge—Aman argues that even frothy markets can spark long-term progress. The conversation also covers AI’s impact on jobs, productivity, and how policy can nurture innovation without strangling it.

Episode Notes

Venture capitalist Aman Verjee joins Gene Tunny to explore whether artificial intelligence is fuelling the next great economic bubble. Drawing lessons from history—from the 1840s railway boom to the 1990s dot-com surge—Aman argues that even frothy markets can spark long-term progress. The conversation also covers AI’s impact on jobs, productivity, and how policy can nurture innovation without strangling it.

Gene would love to hear your thoughts on this episode. You can email him via contact@economicsexplored.com. 

Timestamps

• Introduction and Guest Overview (0:00)
• Aman Verjee's Background and Experience (2:26)
• Aman’s Role and Responsibilities at Practical Venture Capital (5:50)
• AI and Financial Bubbles (10:01)
• AI in Business and Everyday Life (13:30)
• Impact of AI on Jobs and the Economy (17:29)
• US Economy and Government Shutdown (21:27)
• Policies to Boost Productivity (27:29)
• Aman Verjee's Book on Financial Bubbles (37:08)
• Conclusion and Contact Information (43:30)

Takeaways

1. AI may be in a “frothy” phase but not necessarily a bubble—valuations are high, yet many firms are potentially transformative.
2. Past bubbles often produced some lasting value: the 1990s tech and 1840s railway booms birthed major industries that delivered lasting benefits after crashes.
3. AI will reshape, not erase, jobs—disruption creates new roles as others disappear, echoing past technological revolutions.
4. Policy matters: lower regulation, smarter taxation, and education reform are crucial for productivity growth.
5. History’s warning: bubbles fueled by debt (like the 2000s US housing boom and 1880s Melbourne land boom) are far more damaging than equity-driven ones.

Links relevant to the conversation

Aman Verjee’s firm: https://practicalvc.com/

Aman’s trading places podcast:

https://practicalvc.com/trading-places/

Regarding Melbourne house prices: “Melbourne house prices fell 51% in real terms (prices minus inflation) in the 1890s”

https://www.morningstar.com.au/personal-finance/lessons-from-australias-largest-property-busts

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