Dynamic Effects of Patent Policy on Innovation and Inequality in a Schumpeterian Economy

Angus Chu, Yuichi Furukawa, Sushanta Mallick (), Pietro Peretto and Xilin Wang

No 201911, Working Papers from University of Liverpool, Department of Economics

Abstract: This study explores the dyanmic effects of patent policy on innovation and income inequality in a Schumpeterian growth model with endogenous market structure and heterogeneous households. We find that strengthening patent protection has a positive effect on economic growth and a positive or an inverted-U effect on income inequality when the number of differentiated products is fixed or in the short run. However, when the number of products adjusts endogenously, the effects of patent protection on growth and inequality become negative in the long run. We also calibrate the model to US data to perform a quantative analysis and find that the long-run negative effect of patent policy on inequality is much larger than its short-run positive effect. This result is consistent with our empirical finding from a panel vector autoregression.

Keywords: minimum wage; unemployment; innovation; automation (search for similar items in EconPapers)
JEL-codes: D30 O30 O40 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2019-09
New Economics Papers: this item is included in nep-dge, nep-gro, nep-ino and nep-ipr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Forthcoming

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https://www.liverpool.ac.uk/media/livacuk/schoolof ... ,Patent,Policies.pdf First version, 2019 (application/pdf)

Related works:
Journal Article: Dynamic effects of patent policy on innovation and inequality in a Schumpeterian economy (2021)
Working Paper: Dynamic Effects of Patent Policy on Innovation and Inequality in a Schumpeterian Economy (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:201911

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