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Cultural preference on fertility and the growth and welfare effects of intellectual property rights

Chu, Angus C. and Cozzi, Guido (2011): Cultural preference on fertility and the growth and welfare effects of intellectual property rights.

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Abstract

How does patent policy affect economic growth through human capital accumulation and endogenous fertility? In this study, we develop a scale-invariant R&D-based growth model to analyze an unexplored interaction between intellectual property rights, endogenous fertility, human capital accumulation and economic growth. We find that strengthening patent protection has (a) a positive effect on technological progress, (b) a negative effect on human capital accumulation through a higher rate of fertility, and (c) an ambiguous overall effect on economic growth. Furthermore, a stronger cultural preference for fertility strengthens the negative effect of patent policy relative to its positive effect on economic growth. Finally, we calibrate the model to provide a quantitative analysis on the relative strength of these opposing effects of patent policy.

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