R&D and the Productivity Slowdown

Abstract

The question I shall address in this paper is: Can the slowdown inproductivity growth be explained, wholly or in part, by the recentslowdown in the growth of real R&D expenditures? But first we haveto review the following questions: I) What is to be explained? Whichproductivity and what slowdown? 2) What is the mechanism by whichR&D could have contributed to this slowdown? 3) What did happen toR&D in the relevant period? Besides traversing this somewhat familiarground and reviewing some of the recent literature on this topic,I shall also report on some estimates of my own. The direct answerto the opening question is "probably not." But how we get there needsdocumenting and may prove instructive on its own merits.