Work

The impact of AI on global knowledge work

Year: 2025

Type: article

Abstract: We analyze how Artificial Intelligence (AI) reshapes global knowledge work in a two-region world where firms organize production hierarchically to use knowledge efficiently: the most knowledgeable individuals specialize in problem-solving, while others perform routine work. Before AI, the Advanced Economy specializes in problem-solving services, whereas the Emerging Economy focuses on routine work. AI converts compute — which is located in the Advanced Economy — into autonomous “AI agents” that perfectly substitute for humans with a given level of knowledge. Basic AI reduces the Advanced Economy’s net exports of problem-solving services, potentially reversing pre-AI trade patterns. In contrast, sophisticated AI expands these exports, reinforcing existing trade patterns. Finally, we show that a global ban on AI autonomy redistributes AI’s gains toward lower-skilled workers, while a regional ban — such as prohibiting autonomy only in the Emerging Economy — offers little benefit to lower-skilled workers and harms the most knowledgeable individuals in that region.

Source: Journal of Monetary Economics

DOI: 10.1016/j.jmoneco.2025.103876

Authors: Enrique Ide, Eduard Talamàs

Institution: IESE Business School

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $4,660