article · Journal of Electronic Business & Digital Economics
Artificial intelligence acts as a major driver of economic growth and productivity by processing massive datasets to enhance organizational efficiency and refine decision-making processes. However, these benefits arrive alongside considerable socio-economic challenges, including structural unemployment, growing income inequality, job market polarisation, and the emergence of undesirable industrial structures. By framing these shifts around economic production functions that balance labour and capital, recent research indicates that artificial intelligence can accelerate growth by substituting scarce human labour with expandable capital across the creation of goods, services, and ideas. A review of publications from academia, think tanks, and consultancies underscores that the global economic transition driven by artificial intelligence requires ongoing analysis to understand its complex impacts on employment, technology, and broader development.
Understanding the macroeconomic influence of artificial intelligence helps policymakers, business leaders, and communities prepare for profound shifts in the global workforce. While artificial intelligence enhances productivity and data-driven decision-making, it also introduces substantial disruptions to employment stability and wealth distribution. Recognising both the productive capacity and structural risks is essential for designing policies that foster sustainable economic growth.
The abstract outlines a descriptive literature review of macroeconomic impacts rather than a specific technology, and it does not indicate an application pathway.
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Purpose This paper reviews recent research on the expected economic effects of developing artificial intelligence (AI) through a survey of the latest publications, in particular papers and reports issued by academics, consulting companies and think tanks. Design/methodology/approach Our paper represents a point of view on AI and its impact on the global economy. It represents a descriptive analysis of the AI phenomenon. Findings AI represents a driver of productivity and economic growth. It can increase efficiency and significantly improve the decision-making process by analyzing large amounts of data, yet at the same time it creates equally serious risks of job market polarization, rising inequality, structural unemployment and the emergence of new undesirable industrial structures. Practical implications This paper presents itself as a building block for further research by introducing the two main factors in the production function (Cobb-Douglas): labor and capital. Indeed, Zeira (1998) and Aghion, Jones and Jones (2017) suggested that AI can stimulate growth by replacing labor, which is a limited resource, with capital, an unlimited resource, both for the production of goods, services and ideas. Originality/value Our study contributes to the previous literature and presents a descriptive analysis of the impact of AI on technological development, economic growth and employment.
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DOI: 10.1108/jebde-10-2023-0022
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