Institutions: The productivity boost brought by AI depends on factors such as population and occupational structure

Shanghai Securities News, China Securities Journal: A recent report by Moody’s estimates that among 106 rated sovereign countries, the average productivity increase from generative AI is about 1.5% per year. However, the agency also states that the extent of productivity gains will vary significantly between developed economies and emerging markets, as well as within individual economies. These differences depend on factors such as industry and occupational structures of the workforce, technological readiness, demographic composition, existing unemployment rates, and labor costs. Ultimately, the impact of AI on sovereign credit will depend on whether the productivity improvements it delivers outweigh its social and fiscal costs.