Growth and Welfare Effects of Intellectual Property Rights when Consumers Differ in Income

Christian Kiedaisch

Growth and Welfare Effects of Intellectual Property Rights when Consumers Differ in Income

Christian Kiedaisch

Centre de recherche en economie regionale et politique economique

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Résumé

This paper analyzes how changing the expected length of intellectual property (IP) protection 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. The effects of IP protection on growth can be either positive or negative, depending on the distribution of income and wealth. In the case where increasing the length of IP protection increases growth, poorer households prefer a shorter length of protection than richer ones.

langue originale	Anglais
Nombre de pages	70
Etat de la publication	Non publié - 25 oct. 2019

mots-clés

intellectual property rights
income distribution
endogenous growth
non-homothetic preferences

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Kiedaisch, C. (2019). Growth and Welfare Effects of Intellectual Property Rights when Consumers Differ in Income.

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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.

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