Total factor productivity dynamics and the artificial intelligence paradox

Evidence from long-memory analysis

Dados Bibliográficos

ID13023331
AutoresMarinko Škare (0000-0001-6426-3692, autor correspondente), Małgorzata Porada-Rochoń (0000-0002-3082-5682), Rozana Veselica Celić
Ano2025
Volume18
Fascículo4
Páginas218-218
Data de publicação2025-12-29
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoJOURNAL OF INTERNATIONAL STUDIES (JOURNAL)
Identificadores do periódicoISSN: 2071-8330 • E-ISSN: 2306-3483
EditoraCentre of Sociological Research, NGO (PUBLISHER)
DOI10.14254/2071-8330.2025/18-4/11
OpenAlexW7124872749
IdiomaEN
Referências citadas75

This paper investigates the artificial intelligence (AI) productivity paradox using total factor productivity (TFP) from 1890 to 2022 and fractional integration and long-memory econometric methods. We find that total factor productivity gains from AI investments may be delayed and diffuse nonlinearly, following long-memory patterns similar to those of previous technological revolutions, resulting in a paradox of long lags, not a lack of innovation. The average TFP growth rate (0.54%) in the AI era is the lowest of any post-war technological wave, with profoundly contradictory persistence measures from the GPH (d=1.730) and Local Whittle (d=0.133) estimators, reflecting fundamental uncertainty about the actual productivity of AI. We observe that the GPH estimator is consistent with the "J-curve" hypothesis of temporary slowdown before long-term gains. In contrast, the Local Whittle estimator suggests productivity effects that may be fleeting and easily commoditized. Cross-country heterogeneity in AI persistence patterns points to the role of local institutions, policies, and complementary investments in mediating the macroeconomic impact of AI. These results imply that the full productivity benefits of AI may be realized over very long-run horizons, providing policymakers and investors with necessary guidance on the timing and nature of the AI revolution

Data envelopment analysis · Estimator · Persistence (discontinuity · Productivity · Productivity model · Slowdown · Total factor productivity · Economic and Technological Innovation · Economic Growth and Productivity · Firm Innovation and Growth