--- title: "A Framework for Economic Growth with Capital-Embodied Technical Change · AI Fault Line" url: https://aifaultline.com/research/p/doi-10-1257-aer-20221180/ description: "AI Fault Line is a neutral, evidence-cited field guide to why experts looking at the same developments disagree about AI's effect on productivity, jobs, inequality, regulation and the pace of change." --- [Research](https://aifaultline.com/research/) # A Framework for Economic Growth with Capital-Embodied Technical Change Benjamin F. Jones, Xiaojie Liu · American Economic Review · 30 Apr 2024 [Read original source](https://doi.org/10.1257/aer.20221180) Where this sits in the debate - [Will AI actually boost productivity and growth?](https://aifaultline.com/debate/productivity/) · its finding: it depends ([why studies differ](https://aifaultline.com/debate/productivity/#why)) Direction of the finding as read from the abstract by an AI model ([AI-written](https://aifaultline.com/about/)). ## Abstract Technological advance is often embodied in capital inputs, like computers, airplanes, and robots. This paper builds a framework where capital inputs advance through (i) increased automation and (ii) increased productivity. The interplay of these two innovation dimensions can produce balanced growth, satisfying the Uzawa Growth Theorem even though technological progress is capital-embodied. The framework can further address structural transformation, general-purpose technologies, the limited macroeconomic impact of computing, and declining productivity growth and labor shares. Overall, this tractable framework can help resolve puzzling tensions between micro-level observations of innovation and balanced growth while providing new perspectives on numerous macroeconomic phenomena. (JEL E22, E23, E24, E25, L16, O33, O41) ## About this publication **Top journal.** One of the journals economics departments rank highest: the “top five” economics journals, and the general-science journals Science and Nature. Placed by: Top five economics journals. [How sources are ranked](https://aifaultline.com/about/#source-ranking). Published 2024 (30 months ago) Citations 36 (OpenAlex) ## Citations in context [Chart: 36 citations, cohort median 47] 36 citations — 35th percentile among the 23 indexed papers from 2024 in this collection. Citation counts favor older papers; this compares only same-year papers here, not the whole literature. [Chart: published 2024] □ added to this collection in 2026. Benjamin Jones signed the wemustactnow.ai letter · author affiliation matches seed institution northwestern university — part of why this paper is in the collection. ## More on this topic Related by theme, not necessarily by method or conclusion. - [A Research Agenda for the Economics of Transformative AI](https://aifaultline.com/research/p/doi-10-1145-3769433/) Communications of the ACM · 2026 - [Economic Growth Under Transformative AI](https://aifaultline.com/research/p/doi-10-1146-annurev-economics-051624-061002/) Annual Review of Economics · 2023 - [Economic impacts of AI-augmented R&D](https://aifaultline.com/research/p/doi-10-1016-j-respol-2024-105037/) Research Policy · 2024 - [The Potentially Large Effects of Artificial Intelligence on Economic Growth](https://aifaultline.com/research/p/title-5d84297ca034e372/) Goldman Sachs · 2023 Overview assembled automatically from collected metadata. [How this site is built](https://aifaultline.com/about/).