Differential investment in an AI-based technology and economic growth: a tale of two regions
Differential investment in an AI-based technology and economic growth: a tale of two regions
Author(s): Amitrajeet A. Batabyal, Hamid BeladiSubject(s): Economy, Geography, Regional studies, Regional Geography, ICT Information and Communications Technologies, Socio-Economic Research
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: artificial intelligence; dynamics; economic growth; region, technology;
Summary/Abstract: In this paper, we analyze a dynamic model in which two stylized regions, A and B, use an artificial intelligence (AI)-based technology α(t) to produce a knowledge good Qt. Even though the initial value of the AI-based technology α(0) is identical in both regions, region A saves and hence invests more than region B to make the existing AI-based technology more powerful. We show that this differential investment means that the ratio of the output of the knowledge good in region A to region B or QAQB is continually rising. In other words, without targeted policy, region A will become a "leading region" that experiences economic growth and innovation ahead of region B which will become a "lagging region" that innovates less and hence tends to grow more slowly.
Journal: Eastern Journal of European Studies
- Issue Year: 16/2025
- Issue No: 1
- Page Range: 5-12
- Page Count: 8
- Language: English
