We study the impact of research collaborations in coauthorship networks on total research output. Through the links in the collaboration network researchers create spillovers not only to their direct coauthors but also to researchers indirectly linked to them. We characterize the interior equilibrium when agents spend effort in multiple, possibly overlapping projects, and there are interaction effects in the cost of effort. We bring our model to the data by analyzing the network of scientific coauthorships between economists registered in the RePEc author service. We rank the authors and their departments according to their contribution to aggregate research output, and thus provide the first ranking measure that is based on microeconomic foundations. Moreover, we analyze various funding instruments for individual researchers as well as their departments, and compare them to the economics funding program by the National Science Foundation. Our results indicate that, because current funding schemes do not take into account the availability of coauthorship network data, they are ill-designed to take advantage of the spillover effects generated in scientific knowledge production networks.