Opportunities and Risks of Artificial Intelligence for Productivity

This article reviews recent evidence and projections on the impact of Artificial Intelligence (AI) on productivity growth, with a focus on G7 economies. Drawing on OECD work and related studies, it synthesizes a range of estimates, suggesting that AI could raise annual total factor productivity (TFP) growth by around 0.3–0.7 percentage points in the United States over the next decade. Projected gains in other G7 economies are up to 50 per cent smaller, reflecting differences in sectoral composition and assumptions about the relative pace of AI adoption. The article compares alternative modeling approaches and explores key mechanisms underpinning these projections. It also discusses risks —such as market concentration, algorithmic collusion, and Baumol effects as well as upside potentials related to innovation, skills, and trade integration through AI-driven efficiency gains.