It is sometimes argued that more advertising raises consumption which in turn stimulates output and so economic growth … advertising does not Granger-cause growth but Granger-causes consumption. Consumption, in turn, Granger-causes GDP growth. The … data imply that the immediate impact of more advertising on consumption is positive. However, the long-run effect is …

because of the resources diverted away from R and D into advertising. But these mechanisms generate opposite level effects on …