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The Importance of (Exponentially More) Computing Power

January 10, 2023

Denizens of Silicon Valley have called Moore’s Law “the most important graph in human history,” and economists describe the Moore’s Law-powered I.T. revolution as one of the most important sources of national productivity. But data substantiating these claims tend to either be abstracted – for example by examining spending on I.T., rather than I.T. itself – or anecdotal. In this paper, we assemble direct evidence of the impact that computing power has had on five domains: two computing bellwethers (Chess and Go), and three economically important applications (weather prediction, protein folding, and oil exploration). In line with economic theory, we find that exponential increases in computing power are needed to get linear improvements in outcomes, which helps clarify why Moore’s Law has been so important.