If ChatGPT can write code, summarize legal briefs, and help draft business strategies in seconds, why doesn’t that show up in our productivity statistics?
Economists have long relied on a metric called Total Factor Productivity (TFP) to measure technological progress. But in an era of free digital tools and generative AI, TFP looks more like a rearview mirror than a windshield. It tells us a lot about the past, but almost nothing about where the economy is headed.
You can see the
computer agegenerative AI everywhere but in the productivity statistics.(Adapted from Robert Solow, 1987)