On the cyclicality of R&D: disaggregated evidence

Min Ouyang ()

No 707, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: This paper explores the link between short-run cycles and long-run growth by> examining the cyclical properties of R&D at the disaggregated industry level.> The relationship between R&D and output is estimated using an annual panel of> 20 U.S. manufacturing industries from 1958 to 1998. The results indicate that> R&D is in fact procyclical; but interestingly, estimates using demand-shift> instruments suggest that it responds asymmetrically to demand shocks. We> discuss the possibilities that liquidity constraints and technology> improvement cause the observed procyclicality of R&D.

Keywords: Business cycles; Research and development (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-ino and nep-mac
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:0707

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DOI: 10.26509/frbc-wp-200707

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