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Thursday, February 16, 2006



Comparing expected returns to costs is something I've been trying to get Michael Mandel to consider. I wonder if he reads The New Economist?


Doesn't this corroborate Nordhaus's finding for the US, that the private returns to innovation are tiny?:

Arthur Eckart

Thomas Edison stated: "Genious is one percent inspiration and 99 percent perspiration." Drug firms spend lots on R&D and most drugs fail. However, the successful drugs (that receive FDA approval) often turn out to be blockbusters. High prices for new drugs are needed to offset costs and to continue R&D. Also, new firms in new industries typically start off as "cash hogs," and some will eventually become "cash cows."

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