On the Transition Dynamics in Endogenous Recombinant Growth Models

Privileggi, Fabio

doi:10.1007/978-3-642-04023-8_14

Cited by 5 publications

(55 citation statements)

References 8 publications

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“…Following Privileggi (2010;2015), in the sequel we shall assume that only pairs of ideas can be matched and that the probability of success is described by a hyperbolic function.…”

Section: Model Specification and Transition Dynamicsmentioning

confidence: 99%

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Endogenous Recombinant Growth and Intellectual Property Rights

Marchese¹,

Marsiglio²,

Privileggi³

et al. 2017

Macroecon. Dynam.

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We show that, even in a framework in which monopolistic exploitation of patents does not occur, patents still give rise to serious drawbacks. We build on Weitzman's (1998) recombinant growth model which provides a stylized but clear description of the formation of knowledge externalities. In our framework a benevolent government buys immediately new patents in a competitive market and releases their contents for free. We show that inefficiencies nevertheless arise and welfare can be improved by correcting the market price through a tax-subsidy scheme. We characterize the (asymptotic) steady state equilibrium, and some properties of the transitional path. We show that if certain conditions are met, then the economy will converge to its (asymptotic) balanced growth path, and along such a path growth will be independent of the policy parameter; conversely, transition dynamics are affected by the choice of the policy parameter. We then quantitatively analyze the effect of different policy interventions on welfare, and show that stricter tax (weaker appropriability) regimes lead to higher social welfare.

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“…Following Privileggi (2010;2015), in the sequel we shall assume that only pairs of ideas can be matched and that the probability of success is described by a hyperbolic function.…”

Section: Model Specification and Transition Dynamicsmentioning

confidence: 99%

“…As in Tsur and Zemel (2007), Privileggi (2010;2015) and Privileggi and Marsiglio (2014), under Assumptions A.2-4 two optimal regimes are possible:…”

Section: Model Specification and Transition Dynamicsmentioning

confidence: 99%

Endogenous Recombinant Growth and Intellectual Property Rights

Marchese¹,

Marsiglio²,

Privileggi³

et al. 2017

Macroecon. Dynam.

Self Cite

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“…where C ′ m (A) denotes the derivative of the number of different combinations of m elements as a function of the stock 9 A (Tsur and Zemel, 2007; Privileggi, 2010Privileggi, , 2011; that is, within this approach both the seed production in (2) and the production of new ideas in (1) are referred (as a limit) to the same time instant. Hence, when (2) is substituted into (1), it turns out that the law of motion of knowledge at every instant iṡ…”

Section: Amentioning

confidence: 99%

“…Following Privileggi (2010Privileggi ( , 2011Privileggi ( , 2013, in the sequel we shall assume that only pairs of ideas can be matched 16 and that the probability of success is described by a hyperbolic function.…”

Section: Model Specificationmentioning

confidence: 99%

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Endogenous Recombinant Growth Through Market Production of Knowledge and Intellectual Property Rights

et al. 2015

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We analyze the relationship between economic growth, knowledge production and intellectual property rights. Economists and historians underline different aspects as possible causes of knowledge accumulation; the former stress the role of incentive mechanisms while the latter the autonomous progress of science. We construct a unified theory allowing for the presence of markets and the autonomous accumulation of knowledge by introducing intellectual property right policies in an endogenous recombinant growth model. In this framework a benevolent government should reallocate resources from the final to the knowledge production sector and implement a tax-subsidy scheme in order to correct for the inefficiencies generated by the process. We characterize the (asymptotic) steady state equilibrium, and some properties of the transitional path. We show that if certain conditions are met, then the economy will converge to its (asymptotic) balanced growth path, and along such a path growth will be independent of the government policy; conversely, transition dynamics and the capital to knowledge ratio are affected by the choice of the tax-subsidy parameter. We then quantitatively analyze the effect of different policy interventions on welfare, and show that welfare is increasing in the policy parameter and a strictly positive policy level may be required to avoid stagnation. JEL Classification Numbers: K11; L16; L43; O31; O34; O41

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