[FOR INTERNAL REVIEW] Ernie Tedeschi - What the Productivity Numbers Say About AI

Productivity growth in the US has jumped by about a percentage point since 2023. That's a big deal. Whether AI is the cause, or just the context, is a much harder question to answer than most commentary assumes.

Topics covered:

• Why labor productivity and total factor productivity are telling completely different stories right now
• Why quality-adjusting a data center over months is nearly as hard as comparing a 1790 warship to an Aegis cruiser
• How AI displacement tends to happen: not gradually, but in sudden drops during recessions when firms rebuild with newer technology
• The travel agent case: why the survivors of automation end up paid more, and why that doesn't make the disruption less real
• Why controlling for population aging, the US employment rate is near a non-WWII high — and what that implies about long-run fears
• New business formation as a productivity engine, and whether AI-era solopreneurs will hire up the way small businesses historically have

Research mentioned:

• San Francisco Fed Total Factor Productivity measure — SF Fed

Check out Stripe Economics here: https://stripe.com/research

Follow Ernie on Substack here: https://ernietedeschi.substack.com/

About Ernie Tedeschi: Ernie Tedeschi is chief economist at Stripe and former chief economist at the Council of Economic Advisers. He previously led economics at the Yale Budget Lab. His research spans labor markets, fiscal policy, and the macroeconomics of technological change.

Follow Ben on LinkedIn

Follow us on LinkedIn

Sign up for our Newsletter

Visit our website for more information

Get in touch with us at info@reveliolabs.com