Abstract
R&D in the National Income and Product
Accounts: A First Look at its Effect on GDP, by Barbara M. Fraumeni and
Sumiye Okubo
Presented at the Conference on Measuring Capital in the New Economy, sponsored
by the NBER/CRIW, April 26-27, 2002, Federal Reserve Board, Washington,
D.C.
According to the estimates in
this paper, R&D is a significant contributor to economic growth. Over
the forty-year period studied, 1961-2000, returns to R&D capital accounted
for 10 percent of growth in real GDP. Treating R&D as an investment
raises the national savings rate by two percentage points from 19 to 21
percent.
This paper is a preliminary and exploratory examination of the role of
R&D in the U.S. economy. It extends the National Income and Product
Accounts (NIPA) framework by treating R&D as an investment and imputing
a net return to general government capital. Capitalizing R&D investment
has a small positive effect on the rate of growth of GDP. There is a significant
effect on the distribution of consumption and investment on the product-side
and the distribution of property-type income and labor income on the income-side.
Most importantly, the partial R&D satellite account developed in this
paper increases our understanding of the sources of economic growth.
Last changed:
July 18, 2002
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