IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Endogenous Recombinant Growth through Market Production of Knowledge and Intellectual Property Rights

  • Marchese, Carla


  • Marsiglio, Simone


  • Privileggi, Fabio


  • Ramello, Giovanni


    (University of Turin)

We analyze the relationship between economic growth, knowledge production and intellectual property rights. Economists and historians underline different aspects as possible causes of knowledge accumulation; the former stress the role of incentive mechanisms while the latter the autonomous progress of science. We construct a unified theory allowing for the presence of markets and the autonomous accumulation of knowledge by introducing intellectual property right policies in an endogenous recombinant growth model. In this framework a benevolent government should reallocate resources from the final to the knowledge production sector and implement a tax-subsidy scheme in order to correct for the inefficiencies generated by the process. We characterize the (asymptotic) steady state equilibrium, and some properties of the transitional path. We show that if certain conditions are met, then the economy will converge to its (asymptotic) balanced growth path, and along such a path growth will be independent of the government policy; conversely, transition dynamics and the capital to knowledge ratio are affected by the choice of the tax-subsidy parameter. We then quantitatively analyze the effect of different policy interventions on welfare, and show that welfare is increasing in the policy parameter and a strictly positive policy level may be required to avoid stagnation.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by University of Turin in its series Department of Economics and Statistics Cognetti de Martiis. Working Papers with number 201413.

in new window

Length: 28 pages
Date of creation: Jun 2014
Date of revision:
Handle: RePEc:uto:dipeco:201413
Contact details of provider: Postal: Lungo Dora Siena 100, I-10153 Torino
Phone: +39 011670 4406
Fax: +39 011670 3895
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May.
  2. Shavell, S. & van Ypersele de Strihou, T.P.M.C., 1999. "Rewards versus intellectual property rights," Discussion Paper 1999-26, Tilburg University, Center for Economic Research.
  3. Tom Karkinsky & Nadine Riedel, 2009. "Corporate Taxation and the Choice of Patent Location within Multinational Firms," Working Papers 0914, Oxford University Centre for Business Taxation.
  4. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  5. Ramello, Giovanni B., 2007. "Access to vs. exclusion from knowledge: Intellectual property, efficiency and social justice," POLIS Working Papers 90, Institute of Public Policy and Public Choice - POLIS.
  6. Tsur, Yacov & Zemel, Amos, 2007. "Towards endogenous recombinant growth," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3459-3477, November.
  7. Peter A. Diamond & Emmanuel Saez, 2011. "The Case for a Progressive Tax: From Basic Research to Policy Recommendations," CESifo Working Paper Series 3548, CESifo Group Munich.
  8. Philippe Aghion & Peter Howitt, 2009. "The Economics of Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012634, June.
  9. Bentham, Jeremy, 1843. "A Manual of Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number bentham1843.
  10. Giovanni Ramello, 2011. "Property rights and externalities: the uneasy case of knowledge," European Journal of Law and Economics, Springer, vol. 31(1), pages 123-141, February.
  11. Daron Acemoglu & Ufuk Akcigit, 2012. "Intellectual Property Rights Policy, Competition And Innovation," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 1-42, 02.
  12. Palivos, Theodore & Wang, Ping & Zhang, Jianbo, 1997. "On the Existence of Balanced Growth Equilibrium," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 205-24, February.
  13. Petra Moser, 2013. "Patents and Innovation: Evidence from Economic History," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 23-44, Winter.
  14. Privileggi, Fabio, 2010. "Transition dynamics in endogenous recombinant growth models by means of projection methods," POLIS Working Papers 153, Institute of Public Policy and Public Choice - POLIS.
  15. Stein, Jeremy C. & Dewatripont, Mathias & Aghion, Philippe, 2008. "Academic Freedom, Private-Sector Focus, and the Process of Innovation," Scholarly Articles 3637074, Harvard University Department of Economics.
  16. repec:uto:dipeco:201338 is not listed on IDEAS
  17. James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Imitation," Economics Working Papers 0025, Institute for Advanced Study, School of Social Science.
  18. La Torre, Davide & Marsiglio, Simone, 2010. "Endogenous technological progress in a multi-sector growth model," Economic Modelling, Elsevier, vol. 27(5), pages 1017-1028, September.
  19. Mikko Packalen & Jay Bhattacharya, 2012. "Words in Patents: Research Inputs and the Value of Innovativeness in Invention," NBER Working Papers 18494, National Bureau of Economic Research, Inc.
  20. Karolina Safarzynska & Jeroen C.J.M. Van den Bergh, 2011. "Beyond Replicator Dynamics: Innovation-Selection Dynamics and Optimal Diversity," Post-Print hal-00989520, HAL.
  21. Bo Carlsson & Zoltan J. Acs & David B. Audretsch & Pontus Braunerhjelm, 2009. "Knowledge creation, entrepreneurship, and economic growth: a historical review," Industrial and Corporate Change, Oxford University Press, vol. 18(6), pages 1193-1229, December.
  22. Casey B. Mulligan & Xavier Sala-i-Martin, 1992. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," NBER Working Papers 3986, National Bureau of Economic Research, Inc.
  23. Privileggi, Fabio & Marsiglio, Simone, 2014. "Dynamics and Welfare in Recombinant Growth Models with Intellectual Property Rights: a Computational Method," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201414, University of Turin.
  24. Étienne Chantrel & Andre Grimaud & Frederic Tournemaine, 2012. "Pricing Knowledge and Funding Research of New Technology Sectors in a Growth Model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(3), pages 493-520, 06.
  25. Privileggi, Fabio, 2008. "On the transition dynamics in endogenous recombinant growth models," POLIS Working Papers 120, Institute of Public Policy and Public Choice - POLIS.
  26. Casey B. Mulligan & Xavier Sala-i-Martin, 1991. "A Note on the Time-Elimination Method For Solving Recursive Dynamic Economic Models," NBER Technical Working Papers 0116, National Bureau of Economic Research, Inc.
  27. Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
  28. Joseph E. Stiglitz, 2014. "Intellectual Property Rights, the Pool of Knowledge, and Innovation," NBER Working Papers 20014, National Bureau of Economic Research, Inc.
  29. Martin L. Weitzman, 1998. "Recombinant Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 331-360, May.
  30. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-28, Spring.
  31. Philippe Aghion & Mathias Dewatripont & Jeremy C. Stein, 2008. "Academic freedom, private-sector focus, and the process of innovation," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 617-635.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:uto:dipeco:201413. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Piero Cavaleri)

or (Marina Grazioli)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.