
Contents
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19.1 From Hype to Policy 19.1 From Hype to Policy
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19.2 The Technological Backdrop: Scale, Scope, Firm Size, and Knowledge Diffusion 19.2 The Technological Backdrop: Scale, Scope, Firm Size, and Knowledge Diffusion
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19.2.1 Economies of Scale from Data 19.2.1 Economies of Scale from Data
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19.2.2 Economies of Scale from the Overhead of Developing AI Capabilities 19.2.2 Economies of Scale from the Overhead of Developing AI Capabilities
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19.3.3 Economies of Scope 19.3.3 Economies of Scope
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19.3.4 Knowledge Externalities 19.3.4 Knowledge Externalities
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19.3 Trade Theory and the Case for Industrial and Strategic Trade Policies 19.3 Trade Theory and the Case for Industrial and Strategic Trade Policies
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19.3.1 Scientists, Heterogeneous Scientists, and Superstar Scientists 19.3.1 Scientists, Heterogeneous Scientists, and Superstar Scientists
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19.3.2 Increasing Returns to Scale External to the Firm—A Basic Trade Model 19.3.2 Increasing Returns to Scale External to the Firm—A Basic Trade Model
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19.3.3 Knowledge Creation and Diffusion: Endogenous Growth 19.3.3 Knowledge Creation and Diffusion: Endogenous Growth
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19.3.4 New Economic Geography and Agglomeration 19.3.4 New Economic Geography and Agglomeration
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19.3.5 Cluster Policies 19.3.5 Cluster Policies
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19.4 Behind-the-Border Trade Barriers: The Domestic Regulatory Environment 19.4 Behind-the-Border Trade Barriers: The Domestic Regulatory Environment
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19.5 AI and International Macroeconomics 19.5 AI and International Macroeconomics
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19.6 Conclusion 19.6 Conclusion
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References References
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19 Artificial Intelligence and International Trade
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Published:May 2019
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Abstract
AI will likely raise average incomes and improve well-being, but it may also disrupt labor markets, raise inequality and drive non-inclusive growth. To the extent that progress has been made in understanding the impact of AI, we have been largely uninformed about its international dimensions. This chapter explores the international dimensions of the economics of artificial intelligence. Trade theory emphasizes the roles of scale, competition, and knowledge creation and knowledge diffusion as fundamental to comparative advantage. We explore key features of artificial intelligence with respect to these dimensions and describe the features of an appropriate model of international trade in the context of artificial intelligence. We then discuss policy implications with respect to investments in research, and behind-the-border regulations such as privacy, data localization, standards, and competition. We conclude by emphasizing that there is still much to learn before we have a comprehensive understanding of how artificial intelligence will affect trade.
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