Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18284
Authors: 
Bitzer, Jürgen
Stephan, Andreas
Year of Publication: 
2002
Series/Report no.: 
DIW Discussion Papers 300
Abstract: 
A new method for constructing R&D capital stocks is proposed. Following Schumpeter, the development of R&D capital stocks is modelled as a process of creative destruction. Newly generated knowledge is assumed not only to add to the existing R&D capital stocks but also, by displacing old knowledge, to destroy part of that capital. This is in stark contrast to the perpetual inventory method, which postulates a constant rate of depreciation. We compare both methods by estimating the impact of R&D and spillovers on output in OECD countries, and find that the new approach leads to more sensible and robust results.
Subjects: 
R&D capital stocks
knowledge spillovers
creative destruction
JEL: 
C82
O31
D62
Document Type: 
Working Paper

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