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Why don't recessions encourage more R&D spending?


Abstract: Economists sometimes argue that recessions promote activities that ultimately contribute to long-run growth. But evidence suggests research and development, one important source of economic growth, falls rather than rises during recessions, even for firms that do not appear to be credit constrained. The author discusses an alternative explanation for this pattern.

Keywords: Research and development;

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Provider: Federal Reserve Bank of Chicago

Part of Series: Chicago Fed Letter

Publication Date: 2005

Issue: Nov

Order Number: 220