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Marginal Revolutionanalysis

The Macroeconomic Effect of AI through software engineering

Marginal Revolution
Tuesday, September 29, 2026 at 4:50 AM
~4 min read
Equities

Original Report

We measure how artificial intelligence (AI) affects the economy through its impact on software engineering productivity. We use information from financial markets to develop a forward-looking measure...

We measure how artificial intelligence (AI) affects the economy through its impact on software engineering productivity. We use information from financial markets to develop a forward-looking measure that is available in real time. We estimate the sensitivity of each firm’s stock return to an AI stock market index, and how this sensitivity depends on the […] The post The Macroeconomic Effect of AI through software engineering appeared first on Marginal REVOLUTION.

Glass House Analysis

This story reflects the interconnected nature of modern economic systems, where developments in one sector inevitably affect others. Understanding these connections is essential for grasping how policy decisions and market movements translate into real-world outcomes for families, workers, and communities. The economy is not an abstract system of numbers—it's the sum total of decisions about who works, who prospers, and who struggles.

The implications extend beyond the immediate news cycle. Every economic development creates ripples that affect employment, prices, and opportunities in ways that may not be immediately visible but are deeply felt. By tracking these connections, we can better understand how the economy truly works—not as an abstract machine, but as a human system shaped by and shaping the lives of millions.

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