Planning Your Vacation? Ai Can Help.
The Markets
How fast will an AI-powered economy grow?
Global economic growth has not always been robust. Until the 1700s, economic growth averaged about 0.1 percent per year and was closely tied to population growth. “Bigger harvests allowed more mouths to be fed; more farmers allowed for bigger harvests,” reported The Economist. Eventually, better-nourished people had ideas about how to improve their lives, and economic growth edged higher.
Innovation, investment, and productivity have helped to accelerate global economic growth. Economists measure economic growth (and contraction) using gross domestic product, or GDP, which is the value of all goods and services produced in a region over a period of time.
We live in prosperous times.
In the 20th century, the total amount of goods and services produced exceeded the total amount of goods and services produced in recorded human history. “Between the years 1900 and 2000 world GDP at constant prices has increased about 19-fold, corresponding to an average annual rate of growth of 3 percent,” reported the International Monetary Fund’s research department.
Some countries’ economies grew faster than others. In 2024, the United States had the largest economy in the world (GDP of about $30 trillion). China had the second largest economy (GDP of about $19 trillion, in U.S. dollars), and Germany had the third largest (GDP of about $4.7 trillion, in U.S. dollars).
AI is expected to increase the pace of economic growth, although there is debate about the magnitude of the change. In MIT Management, Dylan Walsh reported:
“Artificial intelligence research is filled with dramatic forecasts. AI will affect almost 40 [percent] of jobs around the world, according to the International Monetary Fund. It will increase global GDP by $7 trillion — or 7 [percent] — over 10 years, predicts Goldman Sachs. Or it will grow between $17.1 and $25.6 trillion annually, if you prefer to go with McKinsey’s estimate. And these projections are relatively conservative compared with others…MIT Institute Professor Daron Acemoglu has a more conservative estimate of how AI will affect the U.S. economy over the next 10 years…the GDP boost would likely be closer to 1 [percent] over that period, Acemoglu suggests.”
“My assessment is that there are indeed much bigger gains to be had from generative AI, which is a promising technology, but these gains will remain elusive unless there is a fundamental reorientation of the industry…in order to focus on reliable information that can increase the marginal productivity of different kinds of workers, rather than prioritizing the development of general human-like conversational tools,” wrote Acemoglu, who is an economist.
Last week, the Standard & Poor’s 500 Index closed at a new high every day, reported Connor Smith of Barron’s. (On June 30, 33 percent of the index was invested in technology stocks.) The Dow Jones Industrial Average and Nasdaq Composite also finished higher. Yields on U.S. Treasuries were mixed over the week.
Planning Your Vacation? Ai Can Help.
Some people enjoy travel planning. They read books about the destination, review online publications for restaurant, hotel, and event information, and ask friends (or locals) for tips and suggestions. But travel planning is not everyone’s jam. If you love vacations and dread the planning, AI travel-planning apps may prove useful, as long as you understand the limitations.
“Travel has become one of the most popular use cases for AI… While AI agents that can manage the entire process of planning and booking your vacation are still some way off, the current generation of AI tools are still pretty handy at helping you with various tasks,” reported Rhiannon Williams of MIT Technology Review.
Here are two things to keep in mind when using AI to plan a trip:
Develop detailed prompts. “Prompts” are the questions you ask AI. Detailed and descriptive prompts tend to produce better answers. Don’t worry, prompts don’t have to be perfect. You can start with the basics like, “What are easy day trips from Rome by train?” Once you have the answer, you can modify your wording and add context, helping AI deliver more detailed and specific information. The more you practice, the better you’ll get. AI can:
- Build itineraries,
- Provide packing lists,
- Offer location history and interesting trivia,
- Recommend top restaurants,
- Offer family-friendly and budget-friendly insights, and
- Tailor visits to your preferences.
Fact-check the answers. Unfortunately, it’s not a good idea to accept the information AI provides as fact. “AI models are prone to making stuff up, which means you should always double-check their suggestions yourself,” reported Williams.
For example, Bloomberg reporter Catherine Thorbecke asked AI to recommend “the best beef noodles in my area [Thailand] — with the very specific request that the shop had to accept credit cards.” The restaurant had fantastic beef noodles, but it only accepted cash.
Regardless, Thorbecke found AI to be a valuable travel companion. She wrote, “I found the tool to be incredibly helpful while navigating a foreign city, using it not just to find spots to eat but also to translate menus and signs, as well as communicate with locals via voice mode. It felt like the ultimate Asia travel hack.”
It’s important to remember that AI may be susceptible to scam travel websites, just like humans are. If an AI travel app directs you to a site for booking, make sure to verify that the site is real. One way to check is by reviewing the web address. Fake websites have URLs that are very similar to those of real websites. The tipoff is usually that the fake address is misspelled, includes strange characters, or has an incorrect domain extension (e.g., .net instead of .com).
Weekly Inspiration
“The wish to travel seems to me characteristically human: the desire to move, to satisfy your curiosity or ease your fears, to change the circumstances of your life, to be a stranger, to make a friend, to experience an exotic landscape, to risk the unknown.”
― Paul Theroux, Author
Best Regards,
California Retirement Advisors