The authors show that, contrary to the beliefs of some previous analysts of international economic growth, the hypotheses of convergence and of mean-reversion are not equivalent. Under some assumptions, the rate of convergence is independent of the degree of mean-reversion; under other assumptions, mean-reversion is a necessary, but not a sufficient, condition for convergence. The authors show the relationship between the convergence test and the mean-reversion test and provide an empirical example in which the null hypothesis of no mean-reversion is rejected but the null hypothesis of no convergence is not rejected.

-This paper develops estimates of the internal costs (measured in terms of foregone current output) associated with the introduction of new plant and equipment into manufacturing establishments, using the Census Bureau's Longitudinal Establishment Data file, a very large and rich source of production and investment data. Our estimates provide strong support for the internal-adjustment-costs hypothesis; they indicate that one-dollar increases in expansion and replacement investment cause, on the average, 35and 21-cent reductions, respectively, in current output. The internal cost of adjusting to equipment appears to be higher than the cost of adjusting to plant.

Presents an overview on accounting for defense contracts. Implications of cost-shifting; Profitability of defense contractors; Capital intensity; Cost allocation; Lower costs of commercial business for government contractors.

The Impact of New Drugs on US Longevity and Medical Expenditure, 1990–2003: Evidence from Longitudinal, Disease-Level Data by Frank R. Lichtenberg. Published in volume 97, issue 2, pages 438-443 of American Economic Review, May 2007

It is the federal government's role to promote in research and development (RD and (2) contracting with private firms and nonprofit organizations (such as universities) to perform RD the winning firm recovered its development costs in the form of profits on the sale of the airplanes, and the losing firms did not recoup their R&D investment (Mansfield, 1971, p. 122).

According to recent estimates, federal budget outlays for research and development (RD this component will rise 28 percent, and absorb 70 percent of all federal R&D spending in 1984, compared to under 50 percent in 1980. Since work corresponding to about one-half of the dollar value of the federal R&D program is generally performed by private industrial firms under contract with federal agencies, the rapid increase in federal R&D outlays will presumably be reflected in a similar increase in the value of commitments by industrial firms to perform government R&D. One of the most important economic questions posed by the large prospective increase in resources allocated to federal contract R&D concerns its consequences for the economy's rate of technical progress, of productivity growth. In the next section I argue that the ultimate impact on productivity depends on how company decisions to finance R&D are affected by the availability of federal contract R&D funds. I then provide a brief review and critique of previous studies of the relationship between companyand federalfinanced R&D performed in industry, and present new estimates which differ from existing ones with respect to both methodology and implications. These estimates are consistent with the hypothesis that increases in federal R&D activity tend to be associated with significant reductions in companyfinanced R&D. A number of studies have attempted to determine the ceteris paribus effects of company and federal R&D on the rate of productivity growth (P) by estimating variants of the equation