Abstract:
AI boosts productivity, but gains depend on how fast countries adopt it into their core activities • Most EU economies are trailing behind AI adoption leaders, with the risk of compounding growth divergence over time. AI is a global trade shock: foreign productivity gains lower import prices but sharpen competition for EU producers. Foreign AI gains bring cheaper imports but erode competitiveness; Europe cannot free-ride its way to growth. Openness and domestic adoption are complements; Europe needs both to fully capture AI's growth potential.
