American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
The Productivity J-Curve: How Intangibles Complement General Purpose Technologies
American Economic Journal: Macroeconomics
vol. 13,
no. 1, January 2021
(pp. 333–72)
Abstract
General purpose technologies (GPTs) like AI enable and require significant complementary investments. These investments are often intangible and poorly measured in national accounts. We develop a model that shows how this can lead to underestimation of productivity growth in a new GPTs early years and, later, when the benefits of intangible investments are harvested, productivity growth overestimation. We call this phenomenon the Productivity J-curve. We apply our method to US data and find that adjusting for intangibles related to computer hardware and software yields a TFP level that is 15.9 percent higher than official measures by the end of 2017.Citation
Brynjolfsson, Erik, Daniel Rock, and Chad Syverson. 2021. "The Productivity J-Curve: How Intangibles Complement General Purpose Technologies." American Economic Journal: Macroeconomics, 13 (1): 333–72. DOI: 10.1257/mac.20180386Additional Materials
JEL Classification
- E22 Investment; Capital; Intangible Capital; Capacity
- E23 Macroeconomics: Production
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- L63 Microelectronics; Computers; Communications Equipment
- L86 Information and Internet Services; Computer Software
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