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Buy, Keep or Sell: Economic Growth and the Market for Ideas

Author

Listed:
  • Ufuk Akcigit

    (Department of Economics, University of Pennsylvania)

  • Murat Alp Celik

    (Department of Economics, University of Pennsylvania)

  • Jeremy Greenwood

    (Department of Economics, University of Pennsylvania)

Abstract

An endogenous growth model is developed where each period firms invest in researching and developing new ideas. An idea increases a firm's productivity. By how much depends on how central the idea is to a firm's activity. Ideas can be bought and sold on a market for patents. A firm can sell an idea that is not relevant to its business or buy one if it fails to innovate. The developed model is matched up with stylized facts about the market for patents in the U.S. The analysis attempts to gauge how efficiency in the patent market affects growth.

Suggested Citation

  • Ufuk Akcigit & Murat Alp Celik & Jeremy Greenwood, 2013. "Buy, Keep or Sell: Economic Growth and the Market for Ideas," PIER Working Paper Archive 13-069, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:13-069
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    References listed on IDEAS

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    More about this item

    Keywords

    Growth; Ideas; Innovation; Misallocation; Patents; Patent Agents; Research and Development; Search frictions;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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