IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-25-00004.html

Artificial Intelligence (AI), financial market and economic growth: A simple theoretical model

Author

Listed:
  • Thiédjé Gaudens-Omer Kouakou

    (University Alassane Ouattara)

Abstract

In this paper, we develop a theoretical model analyzing the role of financial development in the AI-economic growth nexus. Our theoretical framework is inspired by that of Zeira (1998) and Aghion et al. (2017), each articulated with that of Pagano (1993. The results show that AI affects economic growth through two channels: direct effects on the final product market via the productivity of automated tasks, indirect effects via financial market imperfections. In case of strong financial development, AI positively affects economic growth. But in case of weak financial development, AI can reduce economic growth. Taking the financial market into account thus avoids underestimating or overestimating the effect of AI on economic growth. In addition to labor market and education system reforms, our study recommends financial reforms that can improve financial development and more effectively allocate investments to finance AI. More specifically, African countries must invest in AI, holistically, in order to increase their shares in the global AI market.

Suggested Citation

  • Thiédjé Gaudens-Omer Kouakou, 2025. "Artificial Intelligence (AI), financial market and economic growth: A simple theoretical model," Economics Bulletin, AccessEcon, vol. 45(3), pages 1297-1307.
    • Handle: RePEc:ebl:ecbull:eb-25-00004
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I3-P111.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Philippe Aghion & Céline Antonin & Simon Bunel, 2019. "Artificial Intelligence, Growth and Employment: The Role of Policy," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 510-511-5, pages 149-164.
    2. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    3. Hendershott, Terrence & Riordan, Ryan, 2013. "Algorithmic Trading and the Market for Liquidity," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 48(4), pages 1001-1024, August.
    4. Erik Brynjolfsson & Tom Mitchell & Daniel Rock, 2018. "What Can Machines Learn, and What Does It Mean for Occupations and the Economy?," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 43-47, May.
    5. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    6. Bart van Liebergen, 2017. "Machine learning: A revolution in risk management and compliance?," Journal of Financial Transformation, Capco Institute, vol. 45, pages 60-67.
    7. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    8. repec:spo:wpmain:info:hdl:2441/7n49nkmngd8448a5ts5gt5ade0 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gao, Jie & Li, Zhizhuo & Nguyen, Thithuha & Zhang, Wentao, 2025. "Digital transformation and enterprise employment," International Review of Economics & Finance, Elsevier, vol. 99(C).
    2. Fabio Montobbio & Jacopo Staccioli & Maria Enrica Virgillito & Marco Vivarelli, 2024. "The empirics of technology, employment and occupations: Lessons learned and challenges ahead," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1622-1655, December.
    3. Caselli, Mauro & Fracasso, Andrea & Scicchitano, Sergio & Traverso, Silvio & Tundis, Enrico, 2025. "What workers and robots do: An activity-based analysis of the impact of robotization on changes in local employment," Research Policy, Elsevier, vol. 54(1).
    4. Cao, Sean & Jiang, Wei & Wang, Junbo & Yang, Baozhong, 2024. "From Man vs. Machine to Man + Machine: The art and AI of stock analyses," Journal of Financial Economics, Elsevier, vol. 160(C).
    5. Maha Kalai & Hamdi Becha & Kamel Helali, 2024. "Effect of artificial intelligence on economic growth in European countries: a symmetric and asymmetric cointegration based on linear and non-linear ARDL approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-37, December.
    6. Lan Chen & Yufei Ji & Xichen Yao & Hengshu Zhu, 2024. "Occupation Life Cycle," Papers 2406.15373, arXiv.org.
    7. Jurkat, Anne & Klump, Rainer & Schneider, Florian, 2025. "Robots and wages: A meta-analysis," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 541-567.
    8. Kiran Tomlinson & Sonia Jaffe & Will Wang & Scott Counts & Siddharth Suri, 2025. "Working with AI: Measuring the Applicability of Generative AI to Occupations," Papers 2507.07935, arXiv.org, revised Dec 2025.
    9. Daron Acemoglu & Claire Lelarge & Pascual Restrepo, 2020. "Competing with Robots: Firm-Level Evidence from France," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 383-388, May.
    10. Su, Chi-Wei & Yuan, Xi & Umar, Muhammad & Lobonţ, Oana-Ramona, 2022. "Does technological innovation bring destruction or creation to the labor market?," Technology in Society, Elsevier, vol. 68(C).
    11. Genz, Sabrina & Gregory, Terry & Janser, Markus & Lehmer, Florian & Matthes, Britta, 2021. "How do workers adjust when firms adopt new technologies?," ZEW Discussion Papers 21-073, ZEW - Leibniz Centre for European Economic Research.
    12. Harry Moroz & Mariana Viollaz, 2024. "The Future of Work in Central America and the Dominican Republic," World Bank Publications - Reports 42043, The World Bank Group.
    13. David Autor & Caroline Chin & Anna Salomons & Bryan Seegmiller, 2024. "New Frontiers: The Origins and Content of New Work, 1940–2018," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(3), pages 1399-1465.
    14. Frank M. Fossen & Trevor McLemore & Alina Sorgner, 2024. "Artificial Intelligence and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 20(8), pages 781-904, December.
    15. Raphael Auer & David Köpfer & Josef Sveda, 2024. "The rise of generative AI: modelling exposure, substitution and inequality effects on the US labour market," BIS Working Papers 1207, Bank for International Settlements.
    16. Jason Furman & Robert Seamans, 2019. "AI and the Economy," Innovation Policy and the Economy, University of Chicago Press, vol. 19(1), pages 161-191.
    17. Christenko, Aleksandr, 2022. "Automation and occupational mobility: A task and knowledge-based approach," Technology in Society, Elsevier, vol. 70(C).
    18. Aleksandra Parteka, 2025. "Trade Specialisation in Products Embedding Automation Technologies: Cross-Country Evidence and the Case of Poland," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 47-67.
    19. Jasmine Mondolo, 2022. "The composite link between technological change and employment: A survey of the literature," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1027-1068, September.
    20. Venkat Ram Reddy Ganuthula & Krishna Kumar Balaraman, 2025. "The Paradox of Professional Input: How Expert Collaboration with AI Systems Shapes Their Future Value," Papers 2504.12654, arXiv.org.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-25-00004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.