The Productivity J-Curve: How Intangibles Complement General Purpose Technologies

General purpose technologies (GPTs) like AI enable and require significant complementary investments. These investments are often intangible poorly measured in national accounts. We develop a model that shows how this can lead to underestimation of productivity growth new GPTs early years and, later, when the benefits harvested, overestimation. call phenomenon Productivity J-curve. apply our method US data find adjusting for intangibles related computer hardware software yields TFP level is 15.9 percent higher than official measures by end 2017. (JEL E22, E23, G31, L63, L86)