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Working Paper
The Rapid Adoption of Generative AI
Generative artificial intelligence (AI) is a potentially important new technology, but its impact on the economy depends on the speed and intensity of adoption. This paper reports results from a series of nationally representative U.S. surveys of generative AI use at work and at home. As of late 2024, nearly 40 percent of the U.S. population age 18-64 uses generative AI. 23 percent of employed respondents had used generative AI for work at least once in the previous week, and 9 percent used it every work day. Relative to each technology’s first mass-market product launch, work adoption of ...
Working Paper
Mind the Gap: AI Adoption in Europe and the US
This paper combines international evidence from worker and firm surveys conducted in 2025 and 2026 to document large gaps in AI adoption, both between the US and Europe and across European countries. Cross-country differences in worker demographics and firm composition account for an important share of these gaps. AI adoption, within and across countries, is also closely linked to firm personnel management practices and whether firms actively encourage AI use by workers. Micro-level evidence suggests that AI generates meaningful time savings for many workers. At the macro level, in recent ...
Working Paper
Innovation, Diffusion, and Trade: Theory and Measurement
I develop a multicountry-model in which economic growth is driven mainly by domestic innovation and the adoption of foreign technologies embodied in traded intermediate goods. Fitting the model to data on innovation, output per capita, and trade in varieties for the period 1996-2007, I estimate the costs of both domestic innovation and adopting foreign innovations, and then decompose the sources of economic growth around the world. I find that the adoption channel has been especially important in developing countries, and accounts for about 65% of their ?embodied? growth. Developed countries ...
Working Paper
The Adoption of Non-Rival Inputs and Firm Scope
Custom software is distinct from other types of capital in that it is non-rival---once a firm makes an investment in custom software, it can be used simultaneously across its many establishments. Using confidential US Census data, we document that while firms with more establishments are more likely to invest in custom software, they spend less on it as a share of total capital expenditure. We explain these empirical patterns by developing a model that incorporates the non-rivalry of custom software. In the model, firms choose whether to adopt custom software, the intensity of their ...
The State of Generative AI Adoption in 2025
A new survey shows generative AI usage continues to grow. In the past 12 months, the overall adoption rate rose 10 percentage points to 54.6% of adults (18-64).
Working Paper
The Rapid Adoption of Generative AI
Generative artificial intelligence (AI) is a potentially important new technology, but its impact on the economy depends on the speed and intensity of adoption. This paper reports results from a series of nationally representative U.S. surveys of generative AI use at work and at home. As of late 2024, 45% of the U.S. population age 18-64 uses generative AI. Among employed respondents, 27% used generative AI for work at least once in the previous week: 10% used it every workday, and 17% on some but not all workdays. Relative to each technology’s first mass-market product launch, work ...
Mind the Gap: AI Adoption in Europe and the U.S.
AI adoption is much higher among American workers than it is among European workers. Is this widening the gap between U.S. and EU productivity growth?
Working Paper
Mind the Gap: AI Adoption in Europe and the US
This paper combines international evidence from worker and firm surveys conducted in 2025 and2026 to document large gaps in AI adoption, both between the US and Europe and across European countries. Cross-country differences in worker demographics and firm composition account for an important share of these gaps. AI adoption, within and across countries, is also closely linked to firm personnel management practices and whether firms actively encourage AI use by workers. Micro-level evidence suggests that AI generates meaningful time savings for many workers. At the macro level, in recent ...
Working Paper
Two-sided Market, R&D and Payments System Evolution
It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a two-sided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary ...
Briefing
Innovation, Diffusion and Intellectual Property Rights
Our recent working paper studies innovation and diffusion of technology along an industry's evolution and characterizes how diffusion affects the incentives to innovate. In our analysis, firms participate in a competitive industry and face production capacity constraints. The entry of imitators thus increases industry supply and is socially beneficial to a degree. We show that, from the social welfare point of view, innovators should be compensated for intellectual property rights to internalize their knowledge spillovers to imitators. However, such compensation should be only partial due to ...