Artificial Intelligence, Economic Cycles, and Labor Markets

Abstract

This study examines the role of Artificial Intelligence (AI) in reshaping the dynamics of the economic cycle and the labor market in the digital era. Using systematic literature review methods as well as bibliometric approaches, this study analyzes several recent academic publications that highlight the linkages of AI to automation, economic growth, and welfare distribution. The findings show that AI drives efficiency, innovation, and accelerates growth, while giving rise to new economic patterns. However, its implementation also presents serious challenges, including the risk of structural unemployment, skills polarization, and increasing socio-economic inequality. On the other hand, AI opens up new job creation opportunities in the digital technology, data analytics, and knowledge-based services sectors. The main dilemma that arises is “job destruction versus job creation”, which demands responsive public policy. The study concludes that AI has the potential to be a driver of sustainable economic growth, but it can only be optimized through inclusive policy strategies, investment in digital education, adaptive labor market regulation, and strengthening social protection.