Analyzing the impact of artificial intelligence on Vietnam’s macroeconomy: Approaching scenario simulation using Dynamic Stochastic General Equilibrium model

Abstract

This research examines the impact of Artificial Intelligence (AI) on Vietnam’s macroeconomy during the 2024 - 2030 period using a Dynamic Stochastic General Equilibrium (DSGE) model. The novel contribution is the development of a composite index of AI adoption and the evaluation of three development scenarios: (1) Vietnam emerges as an AI hub, (2) Vietnam integrates into the global AI value chain, and (3) Vietnam faces digital transformation challenges. Results show that AI could increase GDP by 4% to 16% by 2030, depending on the scenario, with impacts on the labor market ranging from a net job creation of 8% to a net job loss of 4%. The study also suggests that AI may exacerbate income inequality without effective policy measures in place. Based on these findings, the paper proposes policies to maximize the benefits and minimize the risks associated with AI for Vietnam’s economy.