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The crash of the knowledge economy

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  • Ugo Pagano
  • Maria Alessandra Rossi

Abstract

This paper advances the hypothesis that some of the roots of the present crisis are to be found in the present institutions of the knowledge economy. While protectionism is seen as a possible dangerous outcome of the crisis, the extent of protectionism inherent to the strengthening and globalisation of intellectual property rights (IPRs) associated, in particular, with the signing of the Trade-related Aspects of Intellectual Property Rights agreement is not generally perceived as one of its possible causes. Indeed, IPRs have acted as 'super-tariffs'. They have particularly raised the cost of investments for countries that had neither abundant cheap labour nor high amounts of intellectual property resources. Moreover, IPRs may have later exerted negative effects even on IP-rich firms, as the proliferation of conflicting rights has led firms to increasingly inhibit each other's investments. The resulting investment strike has manifested itself as a saving glut and has mainly affected the USA in a situation aggravated by inadequate regulations. If intellectual monopolies are one of the causes of the crash, the remedies should not only focus on monetary policy, financial regulations or even on standard Keynesian policies. Aggregate demand stimulus should be coupled with policies that decrease the level of intellectual monopolisation of the economy. Copyright The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Ugo Pagano & Maria Alessandra Rossi, 2009. "The crash of the knowledge economy," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 665-683, July.
  • Handle: RePEc:oup:cambje:v:33:y:2009:i:4:p:665-683
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    File URL: http://hdl.handle.net/10.1093/cje/bep033
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    Citations

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    Cited by:

    1. Charles Gore, 2010. "The global recession of 2009 in a long-term development perspective," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(6), pages 714-738.
    2. Thomas Goda, 2013. "The role of income inequality in crisis theories and in the subprime crisis," Working Papers PKWP1305, Post Keynesian Economics Study Group (PKSG).
    3. Ugo Pagano, 2013. "Love, war and cultures: an institutional approach to human evolution," Journal of Bioeconomics, Springer, vol. 15(1), pages 41-66, April.
    4. Bertrand Chopard & Thomas Cortade & Eric Langlais, 2014. "On patent strength, litigation costs, and patent disputes under alternative damage rules," EconomiX Working Papers 2014-41, University of Paris Nanterre, EconomiX.
    5. Lucchese, Matteo & Nascia, Leopoldo & Pianta, Mario, 2017. "Politica industriale e tecnologia in Italia
      [Industrial policy and technology in Italy]
      ," MPRA Paper 77182, University Library of Munich, Germany.
    6. Marianna Belloc & Ugo Pagano, 2008. "Politics-Business Interaction Paths," Working Papers 109, University of Rome La Sapienza, Department of Public Economics.
    7. Christian Bjørnskov & Niklas Potrafke, 2012. "Political Ideology and Economic Freedom Across Canadian Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(2), pages 143-166.
    8. Matteo Lucchese & Leopoldo Nascia & Mario Pianta, 2016. "Industrial policy and technology in Italy," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(3), pages 233-260, September.
    9. repec:spr:eurasi:v:3:y:2013:i:2:d:10.14208_ebr.2013.03.02.003 is not listed on IDEAS
    10. Kremer, Michael R., 1998. "Patent Buyouts: A Mechanism for Encouraging Innovation," Scholarly Articles 3693705, Harvard University Department of Economics.
    11. Ugo Pagano, 2013. "Technical assets and property rights," Chapters,in: Handbook of Economic Organization, chapter 18 Edward Elgar Publishing.
    12. Hong Bo & Ciaran Driver, 2012. "Agency Theory, Corporate Governance and Finance," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 11 Edward Elgar Publishing.
    13. Driver, Ciaran, 2015. "Advertising’s Elusive Economic Rationale: is there a case for limiting tax relief?," MPRA Paper 68790, University Library of Munich, Germany.
    14. Caregari, Davide, 2010. "Diritti di proprietà intellettuale: sviluppi recenti e prospettive di riforma
      [Intellectual property rights: recent developements and reform prospects]
      ," MPRA Paper 28132, University Library of Munich, Germany.
    15. Denis LANGLET & Blandine LAPERCHE & Gilliane LEFEBVRE, 2010. "Financiarisation Et Crise Economique Mondiale : Quels Impacts Sur La Strategie D‟Innovation Des Groupes Industriels ? Financialisation And Global Economic Crisis: What Impacts On The Innovation Strate," Working Papers 17, Réseau de Recherche sur l’Innovation. / Research Network on Innovation.
    16. Francesco Bogliacino & Giuditta Prato & Daniel Nepelski, 2013. "Ownership Structure and R&D Orientation in ICT Groups," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(2), pages 164-178, December.
    17. Grazia Ietto-Gillies, 2011. "The Role of Transnational Corporations in the Globalisation Process," Chapters,in: The Handbook of Globalisation, Second Edition, chapter 8 Edward Elgar Publishing.
    18. Ugo Pagano, 2016. "Knowledge as a Global Common and the Crisis of the Learning Economy," Department of Economics University of Siena 743, Department of Economics, University of Siena.

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