Document Type
Discussion Paper
Publication Date
4-1-2004
CFDP Number
1457
CFDP Pages
27
Abstract
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.
Recommended Citation
Nordhaus, William D., "Schumpeterian Profits in the American Economy: Theory and Measurement" (2004). Cowles Foundation Discussion Papers. 1733.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1733