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To "B" or Not to "B"; A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model

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  • Danyang Xie

Abstract

This paper studies the welfare consequences of a government regulation that forces a patented equipment to be supplied by a number of independent producers. On the one hand, such a regulation hurts the value of a patent and therefore reduces activities in the R&D sector. On the other hand, the enhanced competition for the equipment improves efficiency in the manufacturing sector. Should monopolies protected by intellectual property rights be broken up? The answer is “no” in a Romer-type growth model, but there is sufficient reason to believe that the answer could be “yes” in a model advocated by Jones (1995).

Suggested Citation

  • Danyang Xie, 2000. "To "B" or Not to "B"; A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model," IMF Working Papers 00/189, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:00/189
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    References listed on IDEAS

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    Cited by:

    1. Nakada, Minoru, 2005. "Deregulation in an energy market and its impact on R&D for low-carbon energy technology," Resource and Energy Economics, Elsevier, vol. 27(4), pages 306-320, November.

    More about this item

    Keywords

    Economic models; Economic growth; R&D; Growth; Competition Policy; r & d; growth rate; growth model; growth rate of output; r & d activity;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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