Patents and quality growth in OLG economy

Gilad Sorek

Journal of Macroeconomics, 2011, vol. 33, issue 4, 690-699

Abstract: This paper shows how heterogeneity in patent ownership across generations and lifecycle saving considerations qualitatively change the conventional implications of patent policy for quality growth. We study a close Overlapping Generations economy that grows through sequential quality improvements (“quality-ladder”), to show that for plausible values of the Inter-temporal Elasticity of Substitution (a) shorter patent length enhances growth (b) under exogenous innovation size loosening patent breadth protection spurs R&D investment and quality growth and (c) the effect of loosening lagging breadth protection on R&D investment and quality growth under endogenous innovation size depends on patents length. Our findings explore a new channel through which strong patents may hinder innovation and emphasize the importance of coordination in patent-policy across the different dimensions of the patents system.

Keywords: Patents; Growth; OLG (search for similar items in EconPapers)
JEL-codes: L16 O31 O34 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:33:y:2011:i:4:p:690-699

DOI: 10.1016/j.jmacro.2011.08.001

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