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AI and Trade: Why Europe Cannot Afford to Lag on Adoption

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  • Muhammed Yıldırım

Abstract

Key MessagesAI boosts productivity, but gains depend on how fast countries adopt it into their core activitiesMost EU economies are trailing behind AI adoption leaders, with the risk of compounding growth divergence over timeAI is a global trade shock: foreign productivity gains lower import prices but sharpen competition for EU producersForeign AI gains bring cheaper imports but erode competitiveness; Europe cannot free-ride its way to growthOpenness and domestic adoption are complements; Europe needs both to fully capture AI’s growth potential

Suggested Citation

  • Muhammed Yıldırım, 2026. "AI and Trade: Why Europe Cannot Afford to Lag on Adoption," EconPol Forum, CESifo, vol. 27(02), pages 15-20, April.
    • Handle: RePEc:ces:epofor:v:27:y:2026:i:02:p:15-20
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    References listed on IDEAS

    as
    1. Erik Brynjolfsson & Daniel Rock & Chad Syverson, 2021. "The Productivity J-Curve: How Intangibles Complement General Purpose Technologies," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 333-372, January.
    2. Francesco Filippucci & Peter Gal & Matthias Schief, 2024. "Miracle or Myth? Assessing the macroeconomic productivity gains from Artificial Intelligence," OECD Artificial Intelligence Papers 29, OECD Publishing.
    3. Erik Brynjolfsson & Danielle Li & Lindsey Raymond, 2025. "Generative AI at Work," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 140(2), pages 889-942.
    4. Diego Comin & Martí Mestieri, 2018. "If Technology Has Arrived Everywhere, Why Has Income Diverged?," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 137-178, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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