Differential investment in an AI-based technology and economic growth: a tale of two regions
In this paper, we analyze a dynamic model in which two stylized regions, A and B, use an artificial intelligence (AI)-based technology α(t) to produce a knowledge good Qt. Even though the initial value of the AI-based technology α(0) is identical in both regions, region A saves and hence invest...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Alexandru Ioan Cuza University of Iasi
2025-06-01
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| Series: | Eastern Journal of European Studies |
| Subjects: | |
| Online Access: | https://ejes.uaic.ro/articles/EJES2025_1601_01_BAT.pdf |
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| Summary: | In this paper, we analyze a dynamic model in which two stylized regions, A and B, use an artificial intelligence (AI)-based technology α(t) to produce a knowledge good Qt. Even though the initial value of the AI-based technology α(0) is identical in both regions, region A saves and hence invests more than region B to make the existing AI-based technology more powerful. We show that this differential investment means that the ratio of the output of the knowledge good in region A to region B or QAQB is continually rising. In other words, without targeted policy, region A will become a "leading region" that experiences economic growth and innovation ahead of region B which will become a "lagging region" that innovates less and hence tends to grow more slowly. |
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| ISSN: | 2068-651X 2068-6633 |