A generalised equilibrium model of random dynamics: analysing the impact of artificial intelligence and digital transformation on Vietnam’s long-term economic growth

This study develops an extended Dynamic Stochastic General Equilibrium (DSGE) model that integrates innovation, artificial intelligence (AI), and digital transformation into a macroeconomic framework for Vietnam. The model employs a parsimonious, single-channel architecture: three forms of rival capital (physical, digital, and AI) enter a single production function, while a non-rival knowledge stock drives endogenous total factor productivity. Calibrated using Vietnamese aggregate evidence and policy anchors for 2000–2024, supplemented by international proxy ranges, the model shows that sustained, institutionally supported investment in AI and digital transformation can raise long-run output and welfare. The magnitude of these conditional gains is moderate and depends strongly on institutional quality and public spending, while remaining quantitatively sensitive to selected knowledge and policy parameters. Artificial intelligence (AI) and digital transformation offer opportunities to improve productivity and living standards in Vietnam. Using an economic model calibrated to Vietnamese macroeconomic evidence for 2000–2024, this study explores alternative investment scenarios. The simulations suggest that sustained investment can raise output and aggregate welfare, with gains depending on institutional capacity to convert public spending into productive knowledge. For policymakers, the implications are to strengthen project selection, accountable implementation, data governance and workforce skills alongside investment, and to phase expenditure according to implementation capacity. Reskilling and support for affected workers matter because aggregate gains do not ensure equal benefits across groups. These are conditional simulations using calibrated AI and digital capital stocks, not forecasts or direct estimates of realised economic effects. The framework can inform policy appraisal and public debate on how technology investment and institutional reform can jointly support Vietnam’s long-term development.