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Last Updated: 10/14/05

News Release

Why Don't Recessions Encourage More R&D Spending?

Economists sometimes argue that recessions promote activities that ultimately contribute to long-run growth. But evidence suggests research and development, one important source of economic growth, falls rather than rises during recessions, even for firms that do not appear to be credit constrained.

Senior Economist Gadi Barlevy discusses this in the latest edition (57KB) of the Chicago Fed Letter.

Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois 60604-1413, USA. Tel. (312) 322-5322

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