This paper explores the link between short-run cycles and long-run growth by examining the cyclicality of Ramp;D. Existing theories propose that Ramp;D is concentrated when output is low, but aggregate data repeatedly show that Ramp;D appears procyclical. We estimate the relationship between...

We develop a model where temporary non-technology shocks can lead to permanent changes in the rate of growth of total factor productivity (TFP). The key ingredient of the model is a matching processes between basic researchers, product developers, and the stock of knowledge of the economy. In...