Effects of Patent Policy on Income and Consumption Inequality in a R&D Growth Model

Angus Chu

Southern Economic Journal, 2010, vol. 77, issue 2, 336-350

Abstract: To analyze the effects of patent policy on growth and inequality, this article develops a quality‐ladder model with wealth heterogeneity and elastic labor supply. The model predicts that strengthening patent protection increases (a) economic growth by stimulating spending on research and development and (b) income inequality by raising the return on assets. Elastic labor supply creates an additional effect on income inequality. As for consumption inequality, the effect is ambiguous and depends on the elasticity of intertemporal substitution. Calibrating the model to the U.S. data shows that strengthening patent protection increases income inequality by more than consumption inequality, and this pattern is consistent with the data.

Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://doi.org/10.4284/sej.2010.77.2.336

Related works:
Working Paper: Effects of Patent Policy on Income and Consumption Inequality in an R&D-Growth Model (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:77:y:2010:i:2:p:336-350

Access Statistics for this article

More articles in Southern Economic Journal from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().