Schumpeterian Profits and the Alchemist Fallacy Revised
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. The paper derives the underlying equations for Schumpeterian profits. It then estimates the value of these profits for the non-farm business economy and for major industries. It concludes that only a miniscule 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. These results indicate that the bubble of new-economy stocks in the 1990s resulted from the alchemist fallacy.Download Info
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Paper provided by Yale University, Department of Economics in its series Working Papers with number 6.Length:
Date of creation: Apr 2005
Date of revision:
Handle: RePEc:ecl:yaleco:6
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Keywords:Find related papers by JEL classification:
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
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As found by EconAcademics.org, the blog aggregator for Economics research:- The growth problem
by chris dillow in Stumbling and Mumbling on 2011-08-07 11:01:20
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