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

Efraim Benmelech, Janice Eberly, Dimitris Papanikolaou and Joshua Krieger

AEA Papers and Proceedings, 2021, vol. 111, 336-40

Abstract: Investment in intangible capital such as R&D has 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 United States is done by pharmaceutical firms and geared to developing drugs for older patients. Increased life expectancy and quality of life for the elderly increases welfare but may not be reflected in estimates of total factor productivity.

JEL-codes: I11 J11 L65 O32 O47 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Working Paper: Private and Social Returns to R&D: Drug Development and Demographics (2021)
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DOI: 10.1257/pandp.20211104

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