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The Global Impact of AI: Mind the Gap

Author

Listed:
  • Mr. Eugenio M Cerutti
  • Antonio I Garcia Pascual
  • Yosuke Kido
  • Longji Li
  • Mr. Giovanni Melina
  • Ms. Marina Mendes Tavares
  • Mr. Philippe Wingender

Abstract

This paper examines the uneven global impact of AI, highlighting how its effects will be a function of (i) countries’ sectoral exposure to AI, (ii) their preparedness to integrate these technologies into their economies, and (iii) their access to essential data and technologies. We feed these three aspects into a multi-sector dynamic general equilibrium model of the global economy and show that AI will exacerbate cross-country income inequality, disproportionately benefiting advanced economies. Indeed, the estimated growth impact in advanced economies could be more than double that in low-income countries. While improvements in AI preparedness and access can mitigate these disparities, they are unlikely to fully offset them. Moreover, the AI-driven productivity gains could reduce the traditional role of exchange rate adjustments due to AI’s large impact in the non-tradable sector—a mechanism akin to an inverse Balassa-Samuelson effect.

Suggested Citation

  • Mr. Eugenio M Cerutti & Antonio I Garcia Pascual & Yosuke Kido & Longji Li & Mr. Giovanni Melina & Ms. Marina Mendes Tavares & Mr. Philippe Wingender, 2025. "The Global Impact of AI: Mind the Gap," IMF Working Papers 2025/076, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2025/076
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