1. We use this measure of investment in R&D for two reasons. First, this is the variable that determines the growth rate of productivity in our model, as well as in the seminal growth frameworks developed by Aghion and Howitt (1992), Grossman and Helpman (1991) and Romer (1990). Second, Kung and Schmid (2015), using US data for the period 1953-2008, show that this variable predicts productivity, output and consumption growth at horizons of one to five years;R&D intensity. R&D intensity is the ratio of investment in R&D to R&D stock for the business sector