Artificial Intelligence in Economic and Financial Decision-Making: A Comprehensive Review
DOI:
https://doi.org/10.61424/3ay31f56Keywords:
Artificial intelligence, financial trading, investment management, cybersecurity, labor marketsAbstract
Artificial intelligence (AI) has emerged as a transformative force in economic and financial decision-making, reshaping traditional analytical frameworks and operational processes across global markets. This comprehensive review examines the evolving role of AI technologies including machine learning, deep learning, natural language processing, expert systems, and predictive analytics in enhancing decision-making within economics and finance. The study explores how AI-driven systems improve forecasting accuracy, automate financial operations, optimize portfolio management, detect fraud, assess credit risk, and support strategic economic planning. Furthermore, the review highlights the growing integration of AI in banking, insurance, investment management, financial trading, and public economic policy formulation. The paper also evaluates the advantages of AI adoption, such as increased efficiency, data-processing capability, real-time analysis, reduced human error, and improved predictive performance. At the same time, it critically examines the major challenges associated with AI implementation, including algorithmic bias, ethical concerns, data privacy risks, cybersecurity threats, regulatory uncertainty, and the lack of transparency in complex AI models. Particular attention is given to the implications of AI for financial stability, labor markets, and institutional governance in both developed and developing economies. By synthesizing recent academic literature, industry reports, and empirical findings, this review provides a broad understanding of the opportunities and limitations of AI in economic and financial contexts. The study concludes that while AI has substantial potential to revolutionize decision-making processes, effective governance frameworks, ethical standards, and human oversight remain essential to ensure responsible and sustainable adoption. The review offers valuable insights for researchers, policymakers, financial institutions, and technology developers seeking to understand the future trajectory of AI-driven economic and financial systems.
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