THE MACROECONOMIC EFFECT OF AI: SIZING THE SOFTWARE ENGINEERING CHANNEL

2026

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AI-generated summary

1) By linking firm-level stock returns to software engineering payroll shares, this paper provides a forward-looking, real-time macroeconomic assessment of AI's productivity and GDP impacts.

2)
- Employs a structural model and financial market data to estimate that AI news from November 2022 to December 2025 implies a 32.6% permanent increase in software engineering productivity and a 3.61% increase in GDP.
- Evaluates extensions incorporating task-based production, production networks, and an R&D/innovation channel (which nearly doubles the baseline GDP impact to 6.48%).
- Tracks real-time productivity and GDP news, revealing a sharp acceleration in early 2026 driven by the adoption of coding agents.

3) Tags: artificial intelligence, macroeconomic impact, software engineering productivity, asset prices, GDP growth

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