In recent years, a large body of empirical research has investigated whether the predictions of second-generation growth models are consistent with actual data. This strand of literature has focused on the long-run properties of these models by using productivity and innovation data but has not directly asessed the e ectiveness of R&D policy in promoting innovation and economic growth. In the present paper, we fill this gap in the literature by providing a unied growth setting that is empirically tested with US manufacturing industry data. Our analysis shows that R&D policy has a persistent, if not permanent, impact on the rate of economic growth and that the economy rapidly adjusts to policy changes. The impact of R&D tax credits on economic growth appears to be long lasting and statistically robust. Conversely, more generous R&D subsidies are associated with an increase in the rate of economic growth in the short run only, indicating that, at best, this policy instrument has only temporary e ects. Overall, the evidence regarding the e ectiveness of R&D policy provides more support for fully endogenous growth theory than for semi-endogenous growth theory.