The Progression of “Free” Digital Content to AI: Impacts on U.S. Economic Growth and Productivity

We use a barter transaction methodology to measure the impact of advertising-supported media and marketing-supported information, including artificial intelligence (AI), on GDP. We find that including “free” content in consumer entertainment has a substantive impact on recent GDP growth with trend breaks around 1995 and 2022. Including free content increases average GDP quantity growth between 1929 to 1995 by 0.04 percentage point per year, increases average growth between 1995 to 2022 by 0.09 percentage point per year and increases average growth between 2022 and 2025 by 0.22 percentage point per year. Similar trend breaks are observed for total factor productivity growth. It is likely that the trend break around 1995 was due to the development of the internet and the trend break around 2022 was due to the development of AI.