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Globalization, Intellectual Property, and Economic Prosperity

Authors
Disciplines
  • Economics
  • Mathematics
  • Political Science

Abstract

SER100.DVI DOI: 10.1007/s10108-005-0100-3 Span. Econ. Rev. 8, 23–34 (2006) c© Springer-Verlag 2006 Globalization, intellectual property, and economic prosperity� Michele Boldrin, David K. Levine Dept of Economics, University of Minnesota, Minneapolis, MN, 55455, USA (e-mail [email protected]) Abstract. Innovation and the adoption of new ideas is fundamental to economic progress, and so is free trade of goods and services. Herewe examine the underlying economics of the market for ideas and its implications for trade. From a positive perspective, we examine how such markets function and how international trade interact with them. From a normative perspective, we examine the pitfalls of current intellectual property regulations, and how might they be improved. We highlight recent research by ourselves and others challenging the notion that government awards of monopoly through patents and copyright are “the way” to provide ap- propriate incentives for innovation. Key words: Economic theory, game theory JEL Classification: X15, X16 1 Introduction Economic (and, indeed, social) progress is the long run, and altogether surprising, result of the persistent creation of new ideas and goods, their free exchange among individuals, and of the competition among creators, producers and imitators of goods and ideas. As economists have long realized, there would be but a slow and possibly inconsequential improvement in human’s living standardwithout continu- ous and sustained innovation.With a constant technology and the same set of goods, the process of capital accumulation alone would, due to the presence of fixed re- sources and the diminishing returns this brings about, have generated but a fraction � This article is based on the text of the SER Invited Lecture delivered by Michele Boldrin at the 2003 Simposio de Análisis Económico (Seville). We thank National Science Foundation Grants SES 01-14147 and 03-14713 for financial support. Corresponding author: Michele Boldrin 24

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