The economic effects of generative AI (genAI) will depend on the type of technology it ultimately represents. The impact on productivity growth of discrete innovations, such as the light bulb, fades when the market saturates. General-purpose technologies (GPTs), such as the electric dynamo, affect growth over longer horizons through knock-on innovations that enable additional applications. Inventions in the method of invention (IMIs) fuel growth through new ideas that translate into productivity gains. Emerging evidence indicates that genAI is both a GPT and an IMI and, thus, can be expected to have a sustained positive impact on productivity.
Baily et al. (Fri,) studied this question.