Two points will be made: patents are not a constant-yardstick indicator of either inventive input or output; moreover, they are “produced” by a governmental agency, the U.S. Patent Office, that goes through its own budgetary and inefficiency cycle. These considerations effectively dispose of the appearance of absolute declines in such data, but leave the longer-run puzzle of potential diminishing returns to R&D. The paper closes with some comments on that theme.
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