Differential investment in an AI-based technology and economic growth: a tale of two regions

Amitrajeet A. Batabyal () and Hamid Beladi ()
Additional contact information
Amitrajeet A. Batabyal: Rochester Institute of Technology, USA
Hamid Beladi: University of Texas at San Antonio, USA

Eastern Journal of European Studies, 2025, vol. 16(1), 5-12

Abstract: 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 QA/QB 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.

Keywords: artificial intelligence; dynamics; economic growth; region; technology (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ejes.uaic.ro/articles/EJES2025_1601_01_BAT.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jes:journl:y:2025:v:16(1):p:5-12

DOI: 10.47743/ejes-2025-0101

Access Statistics for this article

More articles in Eastern Journal of European Studies from Centre for European Studies, Alexandru Ioan Cuza University Contact information at EDIRC.
Bibliographic data for series maintained by Alupului Ciprian ().