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Concentrated Growth: The Role of the IT Sector
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.
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Firm Growth from the Artificial Intelligence Boom
Recent scientific breakthroughs have sparked a massive boom in artificial intelligence (AI) innovation. Data from the United States Patent and Trademark Office (USPTO) show that the number of patent filings for AI technology has increased at least tenfold since 2015. How is this fast technological progress affecting economic growth? In this article, we answer this question by studying 30 years of innovation in AI, linking the response of the stock market, firms, and economic sectors to the deployment of relevant AI technologies.