AI and International Trade
This paper 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 AI with respect to these dimensions and describe the features of an appropriate model of international trade in the context of AI. 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 AI will affect trade.
The authors thank Dave Donaldson and Hal Varian for their thoughtful feedback. Trefler acknowledges the support of the “Institutions, Organizations and Growth” Program of the Canadian Institute for Advanced Research (CIFAR). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Avi Goldfarb has between $5,000 and $10,000 in equity in several publicly traded technology companies as part of a broad investment portfolio.
Artificial Intelligence and International Trade, Avi Goldfarb, Daniel Trefler. in The Economics of Artificial Intelligence: An Agenda, Agrawal, Gans, and Goldfarb. 2019