Working Paper: NBER ID: w10433
Authors: William D. Nordhaus
Abstract: The present study examines the importance of Schumpeterian profits in the United States economy. Schumpeterian profits are defined as those profits that arise when firms are able to appropriate the returns from innovative activity. We first show the underlying equations for Schumpeterian profits. We then estimate the value of these profits for the non-farm business economy. We conclude that only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers.
Keywords: No keywords provided
JEL Codes: O30; O31; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| technological change (O33) | consumer benefits (D18) |
| technological change (O33) | schumpeterian profits (E11) |
| rapid technological change (O33) | stock prices (G12) |
| schumpeterian profits (E11) | appropriability ratio (G32) |
| appropriability ratio (G32) | multifactor productivity growth (O49) |
| multifactor productivity growth (O49) | schumpeterian profits (E11) |