The productivity j-curve: How intangibles complement general purpose technologies
By: Brynjolfsson, E., Rock, D. and Syverson, C
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Material type: 
BookPublisher: American Economic Journal: Macroeconomics Description: 13(1), Jan, 2021: p.333-372.Subject(s): Investment; Capital; Intangible Capital; Capacity
In:
American Economic Journal: MacroeconomicsSummary: 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. – Reproduced
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Articles
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Indian Institute of Public Administration | 13(1), Jan, 2021: p.333-372 | Available | AR124748 |
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. – Reproduced
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