The Korea Times
OXFORD—“Something Big Is Happening,” wrote artificial intelligence (AI) startup founder Matt Shumer in a recent viral essay that captured his industry’s swelling confidence that the technology will power the next great productivity boom. So far, the economy has not played along. In fact, since slowing sharply in the 1970s, U.S. productivity has experienced only one brief burst of growth: the computer age. Output per hour surged by roughly 3 percent per year in the late 1990s and early 2000s, and then it petered out. Could AI be different? Optimists point to headline labor productivity, which grew at a 1.8 percent annualized rate in the fourth quarter of 2025. But a cleaner measure by the U.S. Federal Reserve Bank of San Francisco, which strips out cyclical intensity (the effect of simply running people and machines harder), shows that labor productivity grew just 0.2% year on year. That is hardly suggestive of “something big.” On the contrary, we would be fortunate to see the technology match even the short-lived computer revolution. Productivity growth will likely underwhe
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