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The impact of procurement-driven technological change on U.S. manufacturing productivity growth


  • David Saal


As we enter the 21st Century, technologies originally developed for defense purposes such as computers and satellite communications appear to have become a driving force behind economic growth in the United States. Paradoxically, almost all previous econometric models suggest that the largely defense-oriented federal industrial R&D funding that helped create these technologies had no discernible effect on U.S. industrial productivity growth. This paper addresses this paradox by stressing that defense procurement as well as federal R&D expenditures were targeted to a few narrowly defined manufacturing sub-sectors that produced high tech weaponry. Analysis employing data from the NBER Manufacturing Productivity Database and the BEA' s Input Output tables then demonstrates that defense procurement policies did have significant effects on the productivity performance of disaggregated manufacturing industries because of a process of procurement-driven technological change.

Suggested Citation

  • David Saal, 2001. "The impact of procurement-driven technological change on U.S. manufacturing productivity growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 12(6), pages 537-568.
  • Handle: RePEc:taf:defpea:v:12:y:2001:i:6:p:537-568
    DOI: 10.1080/10430710108405002

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    Cited by:

    1. Simon Wiederhold, 2009. "Government Spending Composition in a Simple Model of Schumpeterian Growth," Jena Economic Research Papers 2009-101, Friedrich-Schiller-University Jena.
    2. Fanny Coulomb & Jacques Fontanel, 2005. "An Economic Interpretation Of French Military Expenditures," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(4), pages 297-315.
    3. Ruttan, Vernon W., 2008. "General Purpose Technology, Revolutionary Technology, and Technological Maturity," Staff Papers 6206, University of Minnesota, Department of Applied Economics.


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