The Global Impact of AI: Mind the Gap

Eugenio Cerutti, Antonio Garcia Pascual, Yosuke Kido, Longji Li, Giovanni Melina, Marina Mendes Tavares and Philippe Wingender

No 2025/076, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the uneven global impact of AI, highlighting how its effects will be a function of (i) countries’ sectoral exposure to AI, (ii) their preparedness to integrate these technologies into their economies, and (iii) their access to essential data and technologies. We feed these three aspects into a multi-sector dynamic general equilibrium model of the global economy and show that AI will exacerbate cross-country income inequality, disproportionately benefiting advanced economies. Indeed, the estimated growth impact in advanced economies could be more than double that in low-income countries. While improvements in AI preparedness and access can mitigate these disparities, they are unlikely to fully offset them. Moreover, the AI-driven productivity gains could reduce the traditional role of exchange rate adjustments due to AI’s large impact in the non-tradable sector—a mechanism akin to an inverse Balassa-Samuelson effect.

Keywords: Artificial Intelligence; Productivity; Multi-Region DSGE Model; productivity gain; preparedness scenario; AI preparedness; IMF working paper No. 25/76; AI gap; Total factor productivity; Emerging and frontier financial markets; Global; Asia and Pacific; Middle East; Caribbean; Africa (search for similar items in EconPapers)
Pages: 33
Date: 2025-04-11
New Economics Papers: this item is included in nep-ain and nep-dge
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