Accounting for R&D in the National Accounts

The views expressed in the paper do not necessarily reflect the views of the Bureau of Economics or the Department of Commerce. Introduction There has been a great deal of recent attention directed to the importance of investments in intangibles in the growth of economies. The Bureau of Economic Analysis in 2006 and 2007 released R&D Satellite Accounts that illustrate how the incorporation of R&D as investment affects real GDP growth. 1 Corrado, Hulten and Sichel, CHS, (2006) also provide empirical support to the notion that accounting for investment in intangible assets raises the level of investment in the economy. However, drawing the boundary of the set of intangible assets as well as the measurement of its elements are difficult. As a result much of the attention has been more focused on the intangible asset created by R&D spending. In part, the motivation for the attention to R&D is due to the work of Solow and the