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Illustration: Rebecca Zisser/Axios

One of the biggest puzzles in economics is why U.S. productivity growth is so sluggish despite low unemployment and record corporate profits — apart from a spurt during the dotcom boom, the rate has been under half the historical trend since 1970.

What's going on: A group of economists say they have an answer: we are in the middle of a gigantic but invisible technological transition. And, when it's over, productivity growth will return closer to its historical trend.

Quick take: In a presentation at the Dallas Fed on Friday, Chad Syverson, an economics professor at the University of Chicago, said technological history has been one of lag-times between the launch of new technologies and their visibility in productivity numbers. In work he did with MIT's Erik Brynjolfsson and Daniel Rock, Syverson said advances in artificial intelligence in particular simply have not worked their way through the economy and into complementary products.

He cited analogies:

  • At least half of U.S. factories remained unelectrified until 1919, three decades after the invention of the first functional AC motor.
  • It wasn’t until the 1980s, more than 25 years after the invention of the integrated circuit, that computers had penetrated U.S. businesses.
  • It took two decades for e-commerce to reach 10% penetration of retail.

Syverson and his co-authors call this "diffusion" — when a big invention like electricity and internal combustion comes into its own and spawns hundreds or thousands of devices that themselves are also huge but could not otherwise exist.

  • AI will soon diffuse, they say, and produce a second wave of productivity from computerization.

How this could make productivity growth return to its trend, Syverson said:

  • Autonomous vehicles will boost annual productivity by 0.17% for a decade by making the same number of cars move people around with many fewer drivers.
  • Call centers will operate with many fewer workers as AI is installed in their place, increasing annual productivity by a full 1% for a decade.
  • If AI reduces the number of jobs at forecast scale, certain industries will see immense productivity growth, too.

Go deeper

12 mins ago - Health

Moderna to file for FDA emergency use authorization for COVID-19 vaccine

Photo illustration by STR/NurPhoto via Getty Images

Moderna announced that it plans to file with the FDA Monday for an emergency use authorization for its coronavirus vaccine, which the company said has an efficacy rate of 94.1%.

Why it matters: Moderna will become the second company to file for a vaccine EUA after Pfizer did the same earlier this month, potentially paving the way for the U.S. to have two COVID-19 vaccines in distribution by the end of the year. The company said its vaccine has a 100% efficacy rate against severe COVID cases.

The social media addiction bubble

Illustration: Annelise Capossela/Axios

Right now, everyone from Senate leaders to the makers of Netflix's popular "Social Dilemma" is promoting the idea that Facebook is addictive.

Yes, but: Human beings have raised fears about the addictive nature of every new media technology since the 18th century brought us the novel, yet the species has always seemed to recover its balance once the initial infatuation wears off.

Young people's next big COVID test

Illustration: Eniola Odetunde/Axios

Young, healthy people will be at the back of the line for coronavirus vaccines, and they'll have to maintain their sense of urgency as they wait their turn — otherwise, vaccinations won't be as effective in bringing the pandemic to a close.

The big picture: "It’s great young people are anticipating the vaccine," said Jewel Mullen, associate dean for health equity at the University of Texas. But the prospect of that enthusiasm waning is "a cause for concern," she said.

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