TY - UNPB
T1 - Growth and Welfare Effects of Intellectual Property Rights when Consumers Differ in Income
AU - Kiedaisch, Christian
PY - 2019/10/25
Y1 - 2019/10/25
N2 - 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.
AB - 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.
KW - intellectual property rights
KW - income distribution
KW - endogenous growth
KW - non-homothetic preferences
KW - intellectual property rights
KW - income distribution
KW - endogenous growth
KW - non-homothetic preferences
M3 - Discussion paper
BT - Growth and Welfare Effects of Intellectual Property Rights when Consumers Differ in Income
ER -