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Market history has a specific failure mode for technology cycles: equity prices concentrate early on a sector's expected long-run gains, overshoot the timeline that actually materializes, and then correct.
The mechanism turns on timing, not the technology's eventual impact.
European Central Bank economists have applied that frame to AI, calling conditions in the current market "worrisome" in an analysis that draws on historical precedent.
The ECB analysis rests on comparison with prior technology cycles. When a technology genuinely reshapes economic output, early equity pricing tends to run ahead of when that output arrives.
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