Looking into the black box of Schumpeterian growth theories: An empirical assessment of R&D races

This paper assesses whether the most important R&D technologies at the roots of second-generation Schumpeterian growth theories are consistent with innovation statistics. Using US manufacturing industry data, we estimate some systems of simultaneous equations modeling the innovation functions based on variety expansion and diminishing technological opportunities. Our findings indicate that the framework characterized by the increasing difficulty of R&D fits US data better. We discuss the implications of the results for the evolution of the endogenous growth literature.