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Currency Pressure and the Speed of AI Adoption

Countries that adopt AI fastest may face short-term currency appreciation that hurts export competitiveness. A paradox the models reveal but policymakers ignore.

GAMES Research Desk·May 2026·5 min read·Scenario: Acceleration
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Key Findings
  • Fast AI adopters see 4–9% real effective exchange rate appreciation within 3 years.
  • Export-dependent economies face a competitiveness squeeze during the transition window.
  • The effect reverses after year 5 in most scenarios as productivity gains diffuse.