This thesis begins by outlining the theoretical and empirical foundations of the economics of innovations. It then proceeds by analysing four econometric issues in the measurement of technological knowledge embedded in patented innovations and modelling the statistical relationship of the value of patented innovations originating in the G-5 countries overtime. This thesis contributes to the economics of innovation literature in four areas: (1) a comprehensive review of the proxies available to elicit the value embodied in patented inventions (2) a direct comparison of regression estimates based on citations count dependent variable versus citations-weighted dependent variable (3) an introduction and application of Regression Tree and Graphical Modelling methodologies to model patented inventions (4) estimation of the fluctuations and associations in the values of patented innovation in the G-5 countries using patent citations.