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Patents and quality growth in OLG economy

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  • Sorek, Gilad

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.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 33 (2011)
Issue (Month): 4 ()
Pages: 690-699

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Handle: RePEc:eee:jmacro:v:33:y:2011:i:4:p:690-699

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Web page: http://www.elsevier.com/locate/inca/622617

Related research

Keywords: Patents; Growth; OLG;

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References

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Cited by:
  1. Chu, Angus C. & Leung, Charles K.Y. & Tang, Edward, 2012. "Intellectual property rights, technical progress and the volatility of economic growth," Journal of Macroeconomics, Elsevier, Elsevier, vol. 34(3), pages 749-756.

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