Schumpeterian Profits in the American Economy: Theory and Measurement

William D. Nordhaus ()

No 10433, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: O30 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-ent and nep-ino
Date: 2004-04
Note: EFG PR
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Working Paper: Schumpeterian Profits in the American Economy: Theory and Measurement (2004)
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