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A Note on the Implications of Automation and Artificial Intelligence for International Trade

Author

Listed:
  • Bharat Hazari
  • Jennifer T. Lai
  • Vijay Mohan

Abstract

Using the production function suggested by Jones and Manuelli (1990) , this article explores the consequences of introducing automation and artificial intelligence (A&AI) into a trade theoretic framework. An immediate implication is the possibility of a reversal of the trade patterns predicted by standard Heckscher–Ohlin theory, leading to Leontief paradox-type outcomes. We show that the Jones–Manuelli production function is capable of generating factor intensity reversals; consequently, our analysis suggests that factor intensity reversals may have a more prominent role to play in trade theory in the future when AI becomes prevalent. JEL: F10, O30

Suggested Citation

  • Bharat Hazari & Jennifer T. Lai & Vijay Mohan, 2025. "A Note on the Implications of Automation and Artificial Intelligence for International Trade," Arthaniti: Journal of Economic Theory and Practice, , vol. 24(1), pages 92-102, June.
    • Handle: RePEc:sae:artjou:v:24:y:2025:i:1:p:92-102
    DOI: 10.1177/09767479221129186
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    More about this item

    Keywords

    Automation; artificial intelligence; AK production function; Heckscher–Ohlin model; Leontief paradox;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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