TITLE:
Empirical Analysis of the Solow Paradox in Artificial Intelligence
AUTHORS:
Salman Azhar, Zhixuan Zhang, Shengyuan Lu
KEYWORDS:
Artificial Intelligence, Solow Paradox, Economic Growth, Technology Adoption Lag
JOURNAL NAME:
Open Journal of Business and Management,
Vol.13 No.5,
September
26,
2025
ABSTRACT: Technological change serves as the primary engine of economic growth. This study examines the extent to which artificial intelligence (AI) can foster endogenous economic growth using a soft systems methodological approach. Based on endogenous growth theory, the analysis draws on a panel of OECD countries covering the period 2000-2024. This approach is based on endogenous growth theory and on a panel of OECD countries in the time span between 2000 and 2024. The investigation attempts to examine the role of AI as general-purpose technology that will propel economic expansion. It delineates whether the Solow productivity paradox is applicable to AI progress, and studies the transmission mechanism and logic of AI on economic growth. Experience suggests that the rapid progress of AI technology does not automatically translate into greater social productivity and broader economic growth at a national level. This fact reinforces the idea of the Solow paradox. Because of the lagging and complex driving mechanism of AI’s economic growth, the government should take the initiative to promote institution building in human capital investment, infrastructure construction and intangible asset development at the macro-policy level, so that the artificial intelligence can spread and, from then, promote the growth of the macroeconomic output.