The Lindahl equilibrium in Schumpeterian growth models

Abstract We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to U.S. firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patent-level estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations the patent receives in the future. Our new measure is associated with substantial growth, reallocation, and creative destruction, consistent with the predictions of Schumpeterian growth models. Aggregating our measure suggests that technological innovation accounts for significant medium-run fluctuations in aggregate economic growth and TFP. Our measure contains additional information relative to citation-weighted patent counts; the relation between our measure and firm growth is considerably stronger. Importantly, the degree of creative destruction that is associated with our measure is higher than previous estimates, confirming that it is a useful proxy for the private valuation of patents.

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Competition, Imitation, and R&D Productivity in a Growth Model with Industry-Specific Patent Protection

Review of Law & Economics ◽

10.2202/1555-5879.1524 ◽

2011 ◽

Vol 7 (2) ◽

Cited By ~ 6

Author(s):

Malte Mosel

Keyword(s):

Reverse Engineering ◽

Growth Model ◽

Patent Protection ◽

Theoretical Foundation ◽

Growth Models ◽

Empirical Studies ◽

Schumpeterian Growth ◽

Patent Length ◽

Catch Up ◽

Set Up

Recent empirical studies suggest a need for a flexible patent regime responding to industry differences. In practice, industry-specific modifications of patent length already exist but lack theoretical foundation. This paper intends to make up for this neglect by scrutinizing in what direction industry characteristics influence optimal patent length. It is found that patents ought to be shorter, the more intense competition, the higher R&D productivity, and the more intricate reverse engineering in an industry are. Unlike similar Schumpeterian growth models, this model assumes Cournot competition and introduces an empirically substantiated measure of industry differences in the ability to catch up with a technological leader. It is found that for most empirically plausible cases the familiar inverted-U relation between patent length and growth carries over to the Cournot set-up.

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On the Timing of Innovation in Stochastic Schumpeterian Growth Models

SSRN Electronic Journal ◽

10.2139/ssrn.583803 ◽

2004 ◽

Author(s):

Gadi Barlevy

Keyword(s):

Growth Models ◽

Schumpeterian Growth

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The vision sustained

Schumpeter's Venture Money ◽

10.1093/oso/9780198804383.003.0012 ◽

2021 ◽

pp. 287-308

Author(s):

Michael Peneder ◽

Andreas Resch

Keyword(s):

Economic Development ◽

Empirical Research ◽

Financial Frictions ◽

Growth Models ◽

New Keynesian ◽

Monetary Theory ◽

Imperfect Markets ◽

Agent Based ◽

Schumpeterian Growth ◽

Hyman Minsky

This chapter demonstrates how Schumpeter’s monetary theory of economic development has endured and stood the test of time. It first addresses the later monetary theory of John Hicks and early representatives of the dissenting view that money matters to growth. Among these, his students James Tobin and Hyman Minsky carried important elements of his vision into the emerging New Keynesian and Post-Keynesian traditions. From the 1970s onwards, the growing literature on financial frictions substantiated his emphasis on imperfect markets by exact theoretical explanations. These allowed for the further integration of finance into Schumpeterian growth models, which have become a forceful strand of the macroeconomic mainstream since the beginning of the 1990s. Similarly, they provide the theoretical underpinning for scripting the nexus of finance and growth in the more recent waves of agent-based models. Finally, the chapter discusses the empirical research on the nexus between finance and growth.

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