income and product accounts, they appear to be quantitatively important. 5 one recent study estimated that, by the late 1990s, investments in intangible capital by u. s. businesses were as large as investment in traditional, tangible capital ( corrado, hulten, and sichel, 2004 ). recognizing the importance of intangible capital has several interesting implications. first, because investment in intangible capital is typically treated as a current expense rather than as an investment, aggregate saving and investment may be significantly understated in the u. s. official statistics. second, firms ’ need to invest in intangible capital - and thus to divert resources from the production of market goods or services - helps to explain why measured output and productivity may decline initially when firms introduce new technologies. finally, the importance of intangible investment explains to some degree why the lags between ict investment and the resulting productivity gains can be long and variable. because investments in high - tech capital typically require complementary investments in intangible capital for productivity gains to be realized, the benefits of high - tech investment may become visible only after a period of time. in fairness to ict proponents, solow ’ s claim that computers were “ everywhere ” in the 1980s is somewhat exaggerated. aggregate ict investment was considerably higher in the 1990s than in the 1980s. software is one intangible investment that is treated as part of business fixed investment in the u. s. national accounts. medium - term prospects for productivity growth historical analysis of the sources of the productivity acceleration is challenging, but not nearly so challenging as trying to predict how productivity will evolve over the next few years. however, because the rate of productivity growth is a primary determinant of economic performance, policymakers have few options other than to try to forecast future productivity gains. what can be said about the mediumterm prospects for productivity growth? the task of trying to predict the medium - term behavior of productivity is complicated by the fact that productivity growth tends to vary with the business cycle. according to one popular hypothesis, this tendency reflects cyclical variations in the intensity with which labor is utilized. 6 because adjusting the size of a company ’ s labor force may involve significant fixed costs ( including training costs as well as costs of hiring and firing ), employers are generally reluctant to add or subtract workers at the first sign of a change in the demand for their products. thus, in the earliest stages of a contraction, for example, employers may choose

business loans accounting for approximately $ 5 billion. 13 while this amount represents only a small fraction of u. s. unsecured consumer and small business lending overall, the rate of growth is notable. much of the growth in online alternative lending has been supported by innovative uses of technology that allow lending platforms to streamline and automate loan applications, expedite underwriting and quickly price risk, and provide loan applicants with quick loan decisions and access to funds. online alternative lenders use algorithms to provide rapid decisions on loan applications, often taking into account information from a wide range of sources that are not typically involved in bank underwriting of loans. for example, aggregated information for small business underwriting may include data on online banking, accounting, bookkeeping, credit card, shipping, supplier, and social media. so, while traditional banks often focus on personal credit scores for underwriting consumer loans and the majority of small dollar, small business loans, online alternative lenders may analyze a broader variety of data to develop different metrics to measure and price loan risk. currently, the largest platforms typically offer online or mobile applications that allow consumers and small business owners to easily submit information and aggregate vast amounts of data to complete loan applications. although rates vary by platform and borrower characteristics, when taking into account origination fees and repayment periods, the average annual cost of borrowing, or apr, associated with loans and credit products offered by online alternative small business lenders tend to be higher than those associated with traditional bank products. 14 reports suggest that some borrowers are willing to pay a higher price in exchange for an easy application process, a quick decision, and rapid availability of funds. 15 online balance sheet lenders include companies such as ondeck, square capital, fundation, can capital, kabbage, and paypal credit. cash advances, sometimes known as merchant cash advances, capital advances, or business cash advances, are credit products that allow businesses to convert future credit card or payment account receivables into capital ( lipman and wiersch, 2015 ). peer - to - peer lending platforms include companies such as prosper, lending club, and funding circle. see mills and mccarthy ( 2014, p. 42 ). for information on online alternative lenders, see u. s. treasury ( 2015, p. 6 ) ; for more on unsecured consumer loans and small business loans, see morgan stanley research ( 2015 ). for example, mills and mccarthy ( 2014