Endogenous Recombinant Growth and Intellectual Property Rights

Carla Marchese (), Simone Marsiglio, Fabio Privileggi and Giovanni Ramello ()

Department of Economics and Statistics Cognetti de Martiis. Working Papers from University of Turin

Abstract: We show that, even in a framework in which monopolistic exploitation of patents does not occur, patents still give rise to serious drawbacks. We build on Weitzman’s (1998) recombinant growth model which provides a stylized but clear description of the formation of knowledge externalities. In our framework a benevolent government buys immediately new patents in a competitive market and releases their contents for free. We show that inefficiencies nevertheless arise and welfare can be improved by correcting the market price through a tax-subsidy scheme. We characterize the (asymptotic) steady state equilibrium, and some properties of the transitional path. We show that if certain conditions are met, then the economy will converge to its (asymptotic) balanced growth path, and along such a path growth will be independent of the policy parameter; conversely, transition dynamics are affected by the choice of the policy parameter. We then quantitatively analyze the effect of different policy interventions on welfare, and show that stricter tax (weaker appropriability) regimes lead to higher social welfare.

Pages: pages 31
Date: 2017-05
New Economics Papers: this item is included in nep-ino and nep-ipr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ENDOGENOUS RECOMBINANT GROWTH AND INTELLECTUAL PROPERTY RIGHTS (2019)
Working Paper: Endogenous Recombinant Growth and Intellectual Property Rights (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:uto:dipeco:201720

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