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On the cyclicality of R&D: disaggregated evidence

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  • Min Ouyang

Abstract

This paper explores the link between short-run cycles and long-run growth by> examining the cyclical properties of R&D at the disaggregated industry level.> The relationship between R&D and output is estimated using an annual panel of> 20 U.S. manufacturing industries from 1958 to 1998. The results indicate that> R&D is in fact procyclical; but interestingly, estimates using demand-shift> instruments suggest that it responds asymmetrically to demand shocks. We> discuss the possibilities that liquidity constraints and technology> improvement cause the observed procyclicality of R&D.

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  • Min Ouyang, 2007. "On the cyclicality of R&D: disaggregated evidence," Working Papers (Old Series) 0707, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:0707
    DOI: 10.26509/frbc-wp-200707
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    References listed on IDEAS

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    Cited by:

    1. Kadri M�nnasoo & Jaanika Merikull, 2011. "How do demand fluctations and credit constraints affect R&D? Evidence from Central, Southern and Eastern Europe," Bank of Estonia Working Papers wp2011-09, Bank of Estonia, revised 19 Jul 2011.

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    Keywords

    Business cycles; Research and development;

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