NORDHAUS ON WHO BENEFITS FROM TECHNOLOGICAL CHANGE. After the announcement of the Nobel Prize, Professor Donald Boudreaux posted here at the Cafe Hayek site to call attention to Nordhaus’s 2004 paper “Schumpeterian Profits in the American Economy: Theory and Measurement”. A summary of the NBER paper is here.
Booudreaux quotes from that Nordhaus paper that “only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers.” To put numbers on the estimate: “nearly all – about 98 percent – of the benefits of technological innovation are captured, not by the entrepreneurs and businesses who introduce them, but by the general public.”
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