Brynjolfsson, Erik. <br/><br/>
Does Machine Translation Affect International Trade? Evidence from a Large Digital Platform / 
Erik Brynjolfsson, Xiang Hui, Meng Liu. 
 - Cambridge, Mass.  National Bureau of Economic Research  2018. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w24917 .
 - Working Paper Series (National Bureau of Economic Research)  no. w24917. .
<br/><br/> August 2018. 
<br/><br/> Artificial intelligence (AI) is surpassing human performance in a growing number of domains. However, there is limited evidence of its economic effects. Using data from a digital platform, we study a key application of AI: machine translation. We find that the introduction of a machine translation system has significantly increased international trade on this platform, increasing exports by 17.5%. Furthermore, heterogeneous treatment effects are all consistent with a substantial reduction in translation-related search costs. Our results provide causal evidence that language barriers significantly hinder trade and that AI has already begun to improve economic efficiency in at least one domain. 
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