In the modern theory of growth, monopoly plays a crucial role both as a cause and an effect of innovation. Innovative firms, it is argued, would have insufficient incentive to innovate should the prospect of monopoly power not be present. This theme of monopoly runs throughout the theory of growth, international trade, and industrial organization. We argue that monopoly is neither needed for, nor a necessary consequence of, innovation. In particular, intellectual property is not necessary for, and may hurt more than help, innovation and growth. We argue that, as a practical matter, it is more likely to hurt.
- L43 - Legal Monopolies and Regulation or Deregulation
- F11 - Neoclassical Models of Trade
- O47 - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O34 - Intellectual Property and Intellectual Capital
- L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
- O31 - Innovation and Invention: Processes and Incentives
- Federal Reserve Bank of Minneapolis. Research Department
- Federal Reserve Bank of Minneapolis
- In Collection:
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