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Foresee the unseen: Evaluating the impact of artificial intelligence on international trade

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  • Jakubik, Adam
  • Rotunno, Lorenzo
  • Saini, Alisha

Abstract

Artificial Intelligence (AI) has the potential to reshape countries’ comparative advantage and transform international trade patterns. In this paper, we model the effect of AI technologies on bilateral trade flows by introducing an AI shock to the production process and analyzing how this shock influences trade dynamics. We then empirically estimate the relationship between AI exposure and bilateral exports in recent years. Our findings reveal that AI has a significant positive correlation with trade: a one standard deviation increase in AI exposure is associated with a 31 percent rise in exports, on average. Additionally, we explore how this effect varies across trading partners, highlighting distinct patterns between advanced, emerging, and low-income economies.

Suggested Citation

  • Jakubik, Adam & Rotunno, Lorenzo & Saini, Alisha, 2025. "Foresee the unseen: Evaluating the impact of artificial intelligence on international trade," Journal of Policy Modeling, Elsevier, vol. 47(4), pages 842-861.
    • Handle: RePEc:eee:jpolmo:v:47:y:2025:i:4:p:842-861
    DOI: 10.1016/j.jpolmod.2025.06.016
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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