{
  "title": "Intangible Investment and Low Inflation: A Framework and Some Evidence",
  "publication": "IMF Working Papers, September 18, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739",
  "overlayPath": "/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/index.md",
  "summary": "Intangible investment is growing as a share of economic activity. We present a simple framework incorporating its distinguishing characteristic of generally greater scalability and lower marginal costs than tangible investment.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Title: Intangible Investment and Low Inflation: A Framework and Some Evidence\n- Authors: Subir Lall, Li Zeng\n- Date: September 18, 2020\n- Abstract summary:\n  - Intangible investment is growing as a share of economic activity.\n  - A simple framework incorporates the distinguishing characteristic of intangible investment: generally greater scalability and lower marginal costs than tangible investment.\n  - Evidence is shown that this may have contributed to more elastic aggregate supply in recent years, consistent with lower inflation and a flattening of the Phillips curve.\n  - The framework highlights channels through which technological change, a large constituent of intangible investment, may be leading to wage stagnation and greater market concentration."
    },
    {
      "heading": "Key Findings",
      "content": "- Intangible investment growth:\n  - Intangible investment is growing as a share of economic activity.\n- Supply elasticity and inflation:\n  - Greater scalability and lower marginal costs associated with intangible assets may have contributed to more elastic aggregate supply in recent years.\n  - Increased supply elasticity is consistent with lower inflation and a flattening of the Phillips curve.\n- Labor market and market structure effects:\n  - Technological change, as a large component of intangible investment, may be leading to wage stagnation.\n  - Technological change may also be contributing to greater market concentration."
    },
    {
      "heading": "Framework and Mechanisms",
      "content": "- Distinguishing characteristic of intangible investment:\n  - Generally greater scalability.\n  - Lower marginal costs than tangible investment.\n- Channels emphasized:\n  - Impact on aggregate supply elasticity via scalability and marginal costs.\n  - Impact on wages through technological change.\n  - Impact on market concentration through returns to scale and technology-driven market dynamics.\n- Analytical context and concepts:\n  - AS-AD framework, aggregate supply curve, returns to scale, output gap."
    },
    {
      "heading": "Evidence and Implications",
      "content": "- Empirical relationship described:\n  - Evidence is presented that links the rise of intangible investment to more elastic aggregate supply, lower inflation, and a flatter Phillips curve.\n- Policy-relevant implications:\n  - Effects on inflation dynamics and monetary policy: lower inflation and a flattening Phillips curve have implications for inflation targeting and monetary policy design.\n  - Labor-market and competition policy considerations: wage stagnation and greater market concentration suggest relevance for labor and competition policies.\n- Subjects and keywords emphasized in the paper:\n  - Subjects: Import prices, Inflation, Inflation targeting, Intangible capital, Labor, Monetary policy, National accounts, Output gap, Prices, Production\n  - Keywords: aggregate supply supply curve, AS-AD framework, economy, Global, import price inflation, Import prices, inflation, inflation target, Inflation targeting, Intangible capital, intangible investment, investment, market concentration, Output gap, returns to scale, Technological change, unemployment, WP\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/bundle-manifest.json)",
    "Authors: Subir Lall, Li Zeng",
    "Published: September 18, 2020",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513557335.001",
    "Title: Intangible Investment and Low Inflation: A Framework and Some Evidence",
    "Authors: Subir Lall, Li Zeng",
    "Date: September 18, 2020",
    "Abstract summary:",
    "Intangible investment growth:",
    "Supply elasticity and inflation:",
    "Labor market and market structure effects:",
    "Distinguishing characteristic of intangible investment:",
    "Channels emphasized:",
    "Analytical context and concepts:",
    "Empirical relationship described:",
    "Policy-relevant implications:",
    "Subjects and keywords emphasized in the paper:",
    "**Working Paper**"
  ],
  "related": [
    {
      "title": "Working Paper",
      "role": "paper",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2020/english/wpiea2020190-print-pdf.pdf",
      "summary": {
        "path": "/-/media/files/publications/wp/2020/english/wpiea2020190-print-pdf.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/wp/2020/english/wpiea2020190-print-pdf.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/index.md",
    "json": "/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/index.json",
    "bundleManifest": "/en/publications/wp/issues/2020/09/18/intangible-investment-and-low-inflation-a-framework-and-some-evidence-49739/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-18T17:42:29.294Z"
}