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Artificial Intelligence and Economic Growth: Opportunities, Challenges, and Future Directions

Author

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  • RAHAL, Imen
  • Khalifa, Zayed

Abstract

Artificial Intelligence (AI) has become one of the most influential drivers of economic transformation in the 21st century. By boosting productivity, optimizing business processes, supporting innovation, and enabling the emergence of new industries, AI contributes significantly to long-term economic growth. However, this technological shift also brings risks such as labor market disruption, inequality, skill mismatches, and regulatory gaps. This article examines the relationship between AI adoption and economic growth, highlighting the mechanisms through which AI stimulates economic performance, the structural challenges it generates, and strategies needed to ensure inclusive and sustainable growth. The paper draws on recent literature, economic reports, and empirical studies to offer a comprehensive perspective on the future of AI-driven economic expansion.

Suggested Citation

  • RAHAL, Imen & Khalifa, Zayed, 2025. "Artificial Intelligence and Economic Growth: Opportunities, Challenges, and Future Directions," MPRA Paper 127061, University Library of Munich, Germany, revised 12 Nov 2025.
    • Handle: RePEc:pra:mprapa:127061
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    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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