@techreport{06333750858e4ff484213a29a6fe35a1,
title = "Growth and Welfare Effects of Intellectual Property Rights when Consumers Differ in Income",
abstract = "This paper analyzes how changing the expected length of intellectual property (IP) protection T affects economic growth and the welfare of rich and poor consumers. The analysis is based on a product-variety model with non-homothetic preferences and endogenous markups in which, in accordance with empirical evidence, rich households consume a larger variety of goods than poorer ones. It is shown that growth is independent of T when there is perfect equality and that T can only substantially affect growth when there is a suffcient degree of inequality. When there is inequality, an increase in T that is applied to both new and previously granted innovations increases growth. A reduction in T that affects only new, but not previously granted innovations, can increase growth if wealth inequality is suffciently high. In the case where increasing T increases growth, poorer households prefer a shorter length of protection T than richer ones.",
keywords = "intellectual property rights, income distribution, endogenous growth, non-homothetic preferences, intellectual property rights, income distribution, endogenous growth, non-homothetic preferences",
author = "Christian Kiedaisch",
note = "Funding Information: I gratefully acknowledge financial support by the Swiss National Science Foundation Grant CRSII1_154446 “Inequality and Globalization: Demand versus Supply Forces and Local Outcomes”. I thank Liliya Khabibulina for providing Fig. 1. I thank three anonymous referees, Gilles Saint-Paul, Franck Portier, Andr{\'e} Grimaud, Vincenzo Denicol{\`o}, Reto F{\"o}llmi, Josef Zweim{\"u}ller, Josef Falkinger, Fabrizio Zilibotti, Kiminori Matsuyama, Iain Cockburn, Manuel Amador, Stefan Legge, Holger Strulik, Christian Catalini, and participants of several conferences and seminars for helpful comments. Publisher Copyright: {\textcopyright} 2020, Springer-Verlag GmbH Germany, part of Springer Nature.",
year = "2021",
month = nov,
doi = "https://doi.org/10.1007/s00199-020-01322-9",
language = "English",
volume = "72",
series = "Economic Theory",
publisher = "Springer New York",
pages = "1121--1170",
type = "WorkingPaper",
institution = "Springer New York",
}
