IMF Working Papers

The Global Impact of AI: Mind the Gap

By Eugenio M Cerutti, Antonio I Garcia Pascual, Yosuke Kido, Longji Li, Giovanni Melina, Marina Mendes Tavares, Philippe Wingender

April 11, 2025

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Eugenio M Cerutti, Antonio I Garcia Pascual, Yosuke Kido, Longji Li, Giovanni Melina, Marina Mendes Tavares, and Philippe Wingender. "The Global Impact of AI: Mind the Gap", IMF Working Papers 2025, 076 (2025), accessed May 24, 2025, https://doi.org/10.5089/9798229008570.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Emerging and frontier financial markets, Financial markets, Production, Productivity, Total factor productivity

Keywords: Africa, AI gap, AI preparedness, Artificial Intelligence, Asia and Pacific, Caribbean, Emerging and frontier financial markets, Global, IMF working paper No. 25/76, Middle East, Multi-Region DSGE Model, Preparedness scenario, Productivity, Productivity gain, Total factor productivity

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