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Economic Development and Stage-Dependent IPR

Bharat Diwakar and Gilad Sorek ()
Authors registered in the RePEc Author Service: Bharat Diwakar ()

No auwp2015-16, Auburn Economics Working Paper Series from Department of Economics, Auburn University

Abstract: We study growth-maximizing Intellectual Property Rights (IPR) policy for developing economy in a close Overlapping-Generations model. We first show that R&D-based growth in such economy is subject to threshold externalities and transitional dynamics. Then we show that the IPR policy that maximizes output growth rates is stage-dependent: in early phases of development weak IPR protection may be necessary to sustain and to fasten economic growth. This is because weaker IPR protection shifts income from the old to the young generation and thereby enhancing saving and investment, which otherwise are insu¢cient to initiate growth. However as the economy develops and growth sustains optimal IPR protection tightens.

Keywords: Stage-Dependent IPR; OLG; Poverty Trap; Growth (search for similar items in EconPapers)
JEL-codes: O31 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-gro, nep-ino, nep-ipr and nep-pr~
Date: 2015-10
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