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Federal research spending and innovation in the U.S. economy

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  • Ngoie, Jacques Kibambe

Abstract

This paper provides a better understanding of federal funding and its impact on the production process of patentable ideas in the U.S. economy. In this study, I develop an expansion of the Marshallian Macroeconomic Model (Ngoie and Zellner, 2012, forthcoming), which is applied to the U.S. science sector and, among other things, compare the return of federal spending on the three components of research activities mainly (1) basic research, (2) applied research, and (3) development research. The findings presented in this study clearly outline that federal funding channeled toward applied research carries a much larger return than research funding assigned to basic or development research. The return on research spending is measured using the number of patents awarded. Furthermore, this study investigates the transformation of patented ideas into new products and the related implications on sectoral economic growth.

Suggested Citation

  • Ngoie, Jacques Kibambe, 2014. "Federal research spending and innovation in the U.S. economy," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 492-506.
    • Handle: RePEc:eee:jpolmo:v:36:y:2014:i:3:p:492-506
    DOI: 10.1016/j.jpolmod.2014.01.010
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    References listed on IDEAS

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    5. Ngoie, Jacques Kibambe & Zellner, Arnold, 2012. "The Use Of A Marshallian Macroeconomic Model For Policy Evaluation: Case Of South Africa," Macroeconomic Dynamics, Cambridge University Press, vol. 16(3), pages 423-448, June.
    6. Ashish Arora & Alfonso Gambardella, 2010. "The Impact of NSF Support for Basic Research in Economics," NBER Chapters, in: Contributions in Memory of Zvi Griliches, pages 91-115, National Bureau of Economic Research, Inc.
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    8. Zellner, Arnold & Israilevich, Guillermo, 2005. "The Marshallian macroeconomic model: A progress report," International Journal of Forecasting, Elsevier, vol. 21(4), pages 627-645.
    9. Schettino, Francesco & Sterlacchini, Alessandro & Venturini, Francesco, 2013. "Inventive productivity and patent quality: Evidence from Italian inventors," Journal of Policy Modeling, Elsevier, vol. 35(6), pages 1043-1056.
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