Endogenous growth without scale effects

This paper presents a simple R&D-driven endogenous growth model to shed light an some puzzling economic trends. The model can account for why patent statistics have been roughly constant even though R&D employment has risen sharply over the last 30 years. The model also illuminates why steadily increasing R&D effort has not led to any upward trend in economic growth rates, as is predicted by earlier R&D-driven endogenous growth models with the "scale effect" property. (JEL O41).