Cozzi, Guido and Galli, Silvia (2011): Upstream innovation protection: common law evolution and the dynamics of wage inequality.
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The incentives to conduct basic or applied research play a central role for economic growth, and this question has not been explored in much detail so far. How does increasing early innovation appropriability affect basic research, applied research, education, and wage inequality? In the US, what does the common law system imply on the macroeconomic responses to institutional change? This paper analyzes the macroeconomic effects of patent protection by incorporating a two-stage cumulative innovation structure into a quality-ladder growth model with skill acquisition. We consider three issues (a) the over-protection vs. the under-protection of intellectual property rights; (b) the evolution of jurisprudence shaping the bargaining power of the upstream innovators; and (c) the implications of strengthening patent protection on wage inequality and growth. We show analytically and numerically how the jurisprudential changes in intellectual property rights witnessed in the US after 1980 can be related to the well-known changes in wage inequality and in education attainments. Basic research patents may have grown disproportionately due increasing jurisdictional protection, eventually compromising applied innovation, education, and growth. By simulations, we show that the dynamic general equilibrium interations may mislead the econometric assessment of the temporary vs persistent effects IPR policy.
|Item Type:||MPRA Paper|
|Original Title:||Upstream innovation protection: common law evolution and the dynamics of wage inequality|
|Keywords:||Basic and Applied R&D; Two-Stage Sequential Innovation; Skill Premium; Inequality and Education; Common Law.|
|Subjects:||K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K40 - General
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O34 - Intellectual Property Rights
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives
|Depositing User:||Guido Cozzi|
|Date Deposited:||29. Jun 2011 12:35|
|Last Modified:||13. Feb 2013 18:03|
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