The Impact of Artificial Intelligence Popularity on Business Confidence Across Firm Sizes: Evidence Through the Lens of Inflation, Unemployment, and Interest Rates
| International Journal of Economics and Management Studies |
| © 2025 by SSRG - IJEMS Journal |
| Volume 12 Issue 10 |
| Year of Publication : 2025 |
| Authors : Aanya Vaswani |
10.14445/23939125/IJEMS-V12I10P103
How to Cite?
Aanya Vaswani, "The Impact of Artificial Intelligence Popularity on Business Confidence Across Firm Sizes: Evidence Through the Lens of Inflation, Unemployment, and Interest Rates," SSRG International Journal of Economics and Management Studies, vol. 12, no. 10, pp. 15-22, 2025. Crossref, https://doi.org/10.14445/23939125/IJEMS-V12I10P103
Abstract:
Artificial Intelligence (AI) has moved quickly from specialized research to everyday use, powering tools that write, design, and assist in decision-making. Its rise has generated both enthusiasm for productivity gains and concern over economic disruption. Although the economic promise of AI is widely discussed, little is known about how the visibility of AI influences a softer but critical economic metric: business confidence. Unlike output measures such as Gross Domestic Product (GDP), business confidence reflects how firms view sales, hiring, and investment, making it an early indicator of future economic activity. This study examines whether the surge in AI visibility affects business confidence differently across firm sizes. To capture this effect, the paper introduces the term AI salience, a composite measure derived from Google Trends search intensity. The study uses data from 2020 through mid-2025. It links AI salience with two main indicators of business sentiment: the NFIB Small Business Optimism Index, which reflects how small firms see their prospects, and the Conference Board CEO Confidence Index, which captures the outlook of large corporations with strong market influence. Comparing these two indicators helps show how attention to AI affects confidence across different types of firms. Additionally, the paper evaluates descriptive comparisons, examines the confidence gap, and applies regression modeling to test whether AI salience influences business confidence once macroeconomic factors such as inflation, unemployment, and interest rates are considered. The study highlights the importance of understanding the potential of AI and how perceptions of technology shape optimism, caution, and decision-making.
Keywords:
AI Salience, Business Confidence Gap, CEO Confidence, GPT, NFIB Index, Macroeconomic Factors.
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