CBO Models Economic Effects Of Federal R&D Funding Changes
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Another interesting finding is that each $1 of additional federal nondefense R&D leads to about 25¢ of additional nonfederal R&D, rather than crowding it out. Who knew public investments in R&D would be so good.
Over 30 years, each extra federal dollar spent on R&D is estimated to raise GDP by: - $3.57 if deficit-financed - $3.82 if deficit-neutral So the long-run growth return is meaningfully positive. Ofc it doesn’t show up immediately. We all know R&D works through productivity, new knowledge, researchers, training, and private-sector spillovers. All those effects build gradually and can peak decades after the money is appropriated.
Bottom line is that public R&D appears to raise long-run GDP, but the payoff takes years, and the budget impact depends heavily on how it’s financed. https://twitter.com/uscbo/status/2074556122308985208