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A Comprehensive Review on the Economics of Artificial Intelligence

Author

Listed:
  • Khalifa, Zayed
  • Rahal, Imene

Abstract

Artificial Intelligence (AI) is rapidly reshaping the global economic landscape as a transformative general-purpose technology with far-reaching implications. This paper provides a comprehensive review of the economics of AI by examining its effects on productivity, labor markets, capital accumulation, firm dynamics, innovation systems, and income distribution. It synthesizes theoretical frameworks and empirical evidence to analyze how AI alters traditional economic models, particularly through modifications to production functions and factor substitution relationships. The study further highlights the growing importance of data as a key economic input and strategic asset, as well as the emergence of “superstar firms” that leverage AI-driven advantages to achieve market dominance. In addition, the paper explores macroeconomic consequences, including productivity growth, structural transformation, and shifts in economic organization, while addressing critical challenges such as inequality, labor market polarization, market concentration, and regulatory limitations. The review concludes by outlining policy considerations aimed at ensuring that AI contributes to inclusive, equitable, and sustainable economic development.

Suggested Citation

  • Khalifa, Zayed & Rahal, Imene, 2026. "A Comprehensive Review on the Economics of Artificial Intelligence," MPRA Paper 128546, University Library of Munich, Germany, revised 10 Mar 2026.
    • Handle: RePEc:pra:mprapa:128546
    as

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    File URL: https://mpra.ub.uni-muenchen.de/128546/1/MPRA_paper_128546.pdf
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    References listed on IDEAS

    as
    1. Rahal, Imene & Khalifa, zayed, 2025. "AI-EcoSCM: A Lean and Agile Framework for Economic Excellence," MPRA Paper 126740, University Library of Munich, Germany, revised 15 Oct 2025.
    2. RAHAL, Imene & KHALIFA, zayed, 2025. "The Blue Economy in the Digital Age: How Information Technologies Are Transforming the Blue Economy," MPRA Paper 127349, University Library of Munich, Germany, revised 16 Nov 2025.
    3. Rahal, Imen & Elloumi, Abdelkarim, 2022. "The analysis of the Bullwhip effect on the supply chain management of perishable products," MPRA Paper 117992, University Library of Munich, Germany.
    4. RAHAL, Imen, 2024. "The Supply Chain Management for Perishables Products : A Literature Review," MPRA Paper 119193, University Library of Munich, Germany.
    5. Rahal, Imen, 2023. "Analyse de la gestion des stocks de produits périssables en utilisant le modèle EOQ en Tunisie [Analysis of stock management for perishable products using EOQ model in Tunisia]," MPRA Paper 118592, University Library of Munich, Germany.
    6. Rahal, Imen & Elloumi, Abdelkarim, 2023. "Climate change's effects on food Security in Sub-Saharan Africa (SSA)," MPRA Paper 118569, University Library of Munich, Germany.
    7. 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.
    8. Rahal, Imen & Elloumi, Abdelkarim, 2021. "Inventory management of perishable products : a case of melon in Tunisia," MPRA Paper 118028, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    1. RAHAL, Imene & KHALIFA, zayed, 2025. "The Blue Economy in the Digital Age: How Information Technologies Are Transforming the Blue Economy," MPRA Paper 127349, University Library of Munich, Germany, revised 16 Nov 2025.
    2. 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.
    3. Rahal, Imene & Khalifa, zayed, 2025. "AI-EcoSCM: A Lean and Agile Framework for Economic Excellence," MPRA Paper 126740, University Library of Munich, Germany, revised 15 Oct 2025.
    4. RAHAL, Imen, 2024. "The Supply Chain Management for Perishables Products : A Literature Review," MPRA Paper 119193, University Library of Munich, Germany.
    5. Rahal, Imen, 2023. "Analyse de la gestion des stocks de produits périssables en utilisant le modèle EOQ en Tunisie [Analysis of stock management for perishable products using EOQ model in Tunisia]," MPRA Paper 118592, University Library of Munich, Germany.

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    JEL classification:

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

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