During the four years 1995-99 U. S. productivity growth experienced a strong revival and achieved growth rates exceeding that of the golden age' of 1913-72. Accordingly many observers have declared the New Economy' (the Internet and the accompanying acceleration of technical change in computers...

During the four years 1995-99 U. S. productivity growth experienced a strong revival and achieved growth rates exceeding that of the golden age' of 1913-72. Accordingly many observers have declared the New Economy' (the Internet and the accompanying acceleration of technical change in computers...

Schumpeterian arguments of “creative destruction” predict that innovation is countercyclical. However, empirical findings demonstrate the contrary. We apply corporate finance principles to macro- and innovation economics and propose a “hurdle-rate theory of inventive procyclicality”....