Why Dont Recessions Encourage More R&D Spending

The paper examines how recessions affect R&D spending -- one such channel for growth during times of reduced profits, according to economist Joseph Schumpeter. If production suffers during recessions while R&D does not, then recessions should be an ideal time to seek out and develop new ideas and products. However, empirical evidence shows that R&D tends to fall during recessions, not rise.