Schumpeterian Cycles with Pro cyclical R &

  title={Schumpeterian Cycles with Pro cyclical R &},
  author={Patrick Francois and Huw Lloyd},
Recent empirical work …nds that R&D expenditures are quite procyclical, even for …rms that are not credit-constrained during downturns. This has been taken as strong evidence against Schumpeterian-style theories of business cycles that emphasize the idea that downturns in production may be good times to allocate labor towards innovative activities. Here we argue that the procyclicality of R&D investment is, in fact, quite consistent with at least one of these theories. In our analysis, we… CONTINUE READING

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