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The impact of artificial intelligence on economic development

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  • Mohamed Ali Trabelsi

Abstract

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.

Suggested Citation

  • Mohamed Ali Trabelsi, 2024. "The impact of artificial intelligence on economic development," Journal of Electronic Business & Digital Economics, Emerald Group Publishing Limited, vol. 3(2), pages 142-155, May.
    • Handle: RePEc:eme:jebdep:jebde-10-2023-0022
    DOI: 10.1108/JEBDE-10-2023-0022
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    References listed on IDEAS

    as
    1. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    2. David Hémous & Morten Olsen, 2022. "The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 179-223, January.
    3. Joseph Zeira, 1998. "Workers, Machines, and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1091-1117.
    4. Egidijus BARCEVICIUS & Cristiano CODAGNONE & Luka KLIMAVICIUTE & Gianluca MISURACA, 2020. "Exploring digital government transformation in the EU: Expert Consultation and Stakeholder Engagement," JRC Research Reports JRC121494, Joint Research Centre.
    5. Ajay Agrawal & Joshua S. Gans & Avi Goldfarb, 2019. "Artificial Intelligence: The Ambiguous Labor Market Impact of Automating Prediction," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 31-50, Spring.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Artificial intelligence; Economic growth; Employment; Automation; Digital labor; J24; O3; O4;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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