Trade in Intermediate Goods, Endogenous Growth and Intellectual Property Rights
The present chapter develops a product cycle model of North-South trade and integrates the Romer (1990) model and Helpman (1993) model. In this chapter, North innovates the variety of intermediate goods, and South imitates it. Final goods are not traded, while a variety of capital-intensive intermediate goods are traded. The effect of intellectual property rights on economic growth is studied. It is shown that a unique steady-state balanced growth equilibrium may exist, or there may be multiple steady-state equilibria, and tighter intellectual property rights may lead to both a higher and a lower steady-state balanced growth rate depending on the human capital endowment of both the countries.
KeywordsHuman Capital Final Good Intermediate Good Balance Growth Balance Growth Path
I am grateful to the participants of the DEGIT 2011 conference for their valuable comments.
- Falvey R, Foster N, Greenaway D (2004) Intellectual Property Rights and Economic Growth. Research Chapter 2004/12, Research chapter series, Internationalisation of Economic Policy, The University of NottinghamGoogle Scholar