TY - JOUR AU - Nordhaus, William D TI - Schumpeterian Profits in the American Economy: Theory and Measurement JF - National Bureau of Economic Research Working Paper Series VL - No. 10433 PY - 2004 Y2 - April 2004 DO - 10.3386/w10433 UR - http://www.nber.org/papers/w10433 L1 - http://www.nber.org/papers/w10433.pdf N1 - Author contact info: William D. Nordhaus Yale University, Department of Economics 28 Hillhouse Avenue Box 208264 New Haven, CT 06520-8264 Tel: 203/432-3598 Fax: 203/432-5779 E-Mail: william.nordhaus@yale.edu M2 - featured in NBER digest on 2011-11-18 AB - 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 minuscule 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. ER -