Schumpeterian Profits in the American Economy: Theory and Measurement

By William Nordhaus. 2004

144 citations recorded by the source corpus.

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 miniscule 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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/56d06792a7f046be14004644a3763ae9b258ec6b

Citations in the corpus

• GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy (2019, unknown): “…(accessed January 2018) 66 Of course, in a competitive market, most of the benefits from innovation go to consumers, not producers (Nordhaus, 2004) 67 This is the arithmetic percentage point difference between the growth in GDP-B and official real GDP growth.”