Concentrated Growth: The Role of the IT Sector

Joel David, Gustavo de Souza and Adalyn Schommer

Chicago Fed Letter, 2025, vol. 515, 9

Abstract: Productivity is the engine of economic growth and a key factor in determining standards of living and economic well-being. In this article, we study the distribution of total factor productivity (TFP) growth across sectors of the U.S. economy—i.e., the composition of TFP growth—and demonstrate that over approximately the past four decades, U.S. TFP growth has been highly concentrated, with the information technology (IT) sector in particular playing a large and outsized role.

Keywords: Total factor productivity; total factor productivity (TFP); Economic growth; IT sector; Employment; Unemployment; wages; intergenerational wealth; Aggregate Human Capital; aggregate labor productivity; Macroeconomics; Cross-country analysis (search for similar items in EconPapers)
JEL-codes: D24 E24 O11 O40 O47 (search for similar items in EconPapers)
Date: 2025
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