Retracted Article: Artificial Intelligence and Economic Growth: A Theoretical Framework

Abstract

The growing adoption of Artificial Intelligence (AI) has sparked ubiquitous concerns worldwide. Artificial intelligence can affect economic growth and employment. The influence is assumed to be substantial because the adoption of AI technology may lead to increased productivity, lower wages, prices, and labor substitution. Artificial intelligence can affect global economic growth with its widespread adoption and diffusion. We mathematically examined the effects of AI on economic growth, reiterating how AI is unique as a production factor. The models show that AI capital lowers capital prices, increases wages, and augments productivity. Besides, AI capital positively affects the labor share and vice versa, provided that AI and labor are complementary. We improved a task-based model to show AI raises both labor share and wages by generating new tasks. We also present the potential policy implications of AI adoption. We conclude AI can contribute to economic growth. Labor-abundant countries should adopt labor-augmenting technology, while countries with an aging population can adopt capital-augmenting technology. However, caution should be exercised in ensuring that the models are leveraged optimally.

Macroeconomic effects of artificial intelligence on emerging economies: Insights from Bangladesh

“…However, when artificial intelligence and, consequently, the artificial intelligence labor and capital replace each other, humans will compete with robots. Wang et al (2021) mention that artificial intelligence can promote economic growth in emerging economies if implemented and leveraged appropriately. However, the technological progress of artificial intelligence will make laborers lose their work or experience poor rewards and shared labor.…”

“…Two theories example the reasons and the impact of the use of AI in economic activities. These theories are the neoclassical production functions (Lankisch et al, 2019;Wang et al, 2021) and the task-based model . According to the "neoclassical production functions theory", using AI in economic growth is to improve production functions by incorporating the elasticity of substation between capital and labor.…”

Using artificial intelligence as business opportunities on the market: An overview

“…Artificial intelligence can affect economic growth and employment. The influence is assumed to be substantial because the adoption of AI technology may lead to increased productivity, lower wages, prices, and labor substitution [13]. On the other hand [14] done research on modelling AI in economics, in their research they said, that it is also illustrate that the contribution of AI to aggregate productive labor service depends not only on the amount of AI services available but on the endogenous number of automated tasks, the relative productivity of standard and IT-related labor, and the substitutability of tasks.…”