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

Erik Brynjolfsson, Daniel Rock and Chad Syverson

American Economic Journal: Macroeconomics, 2021, vol. 13, issue 1, 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.

JEL-codes: E22 E23 G31 L63 L86 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (117)

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Working Paper: The Productivity J-Curve: How Intangibles Complement General Purpose Technologies (2018)
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DOI: 10.1257/mac.20180386

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