Private and Social Returns to R&D: Drug Development and Demographics

Efraim Benmelech, Janice Eberly, Joshua L. Krieger and Dimitris Papanikolaou

No 28355, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Investment in intangible capital—in particular, research and development—increased dramatically since the 1990s. However, productivity growth remains sluggish in recent years. One potential reason is that a significant share of the increase in intangible investment is geared toward consumer products such as pharmaceutical drugs with limited spillovers to productivity. We document that a significant share of R&D spending in the U.S. is done by pharmaceutical firms and is geared to developing drugs for the older patients. Increased life expectancy and quality of life among the elderly increases welfare but may not be reflected in estimates of total factor productivity.

JEL-codes: I10 I15 L65 O32 O34 O40 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-age and nep-hea
Note: CF EFG EH PR
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Published as Efraim Benmelech & Janice Eberly & Dimitris Papanikolaou & Joshua Krieger, 2021. "Private and Social Returns to R&D: Drug Development and Demographics," AEA Papers and Proceedings, vol 111, pages 336-340.

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