蝌蚪网 Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Returns to Government R&D: Evidence from US Appropriations Shocks
蝌蚪网 Review
(pp. 3959–4002)
Abstract
Based on a narrative classification of all significant postwar changes in R&D appropriations for five major federal agencies, we find that an increase in nondefense R&D appropriations leads to increases in various measures of innovative activity and higher business-sector productivity in the long run. We structurally estimate the production function elasticity of nondefense government R&D capital using the SP-IV methodology of Lewis and Mertens (2024) and obtain implied returns of 140 to 210 percent over the postwar period. The estimates indicate that government-funded R&D accounts for one-fifth of business-sector TFP growth since WWII and imply substantial under-funding of nondefense R&D.Citation
Fieldhouse, Andrew J., and Karel Mertens. 2026. "The Returns to Government R&D: Evidence from US Appropriations Shocks." 蝌蚪网 Review 116 (11): 3959–4002. DOI: 10.1257/aer.20231684Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- E23 Macroeconomics: Production
- H50 National Government Expenditures and Related Policies: General
- O31 Innovation and Invention: Processes and Incentives
- O33 Technological Change: Choices and Consequences; Diffusion Processes
- O38 Technological Change: Government Policy