journal article Jan 01, 2021

The Productivity J-Curve: How Intangibles Complement General Purpose Technologies

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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. (JEL E22, E23, G31, L63, L86)
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Metrics
240
Citations
70
References
Details
Published
Jan 01, 2021
Vol/Issue
13(1)
Pages
333-372
Cite This Article
Erik Brynjolfsson, Daniel Rock, Chad Syverson (2021). The Productivity J-Curve: How Intangibles Complement General Purpose Technologies. American Economic Journal: Macroeconomics, 13(1), 333-372. https://doi.org/10.1257/mac.20180386
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