To "B" or Not to "B" : A Welfare Analysis of Breaking Up Monopolies in an Endogenous Growth Model

Author/Editor:

Danyang Xie

Publication Date:

November 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper studies the welfare consequences of a government regulation that forces a patented equipment to be supplied by a number of independent producers. On the one hand, such a regulation hurts the value of a patent and therefore reduces activities in the R&D sector. On the other hand, the enhanced competition for the equipment improves efficiency in the manufacturing sector. Should monopolies protected by intellectual property rights be broken up? The answer is “no” in a Romer-type growth model, but there is sufficient reason to believe that the answer could be “yes” in a model advocated by Jones (1995).

Series:

Working Paper No. 00/189

Subject:

English

Publication Date:

November 1, 2000

ISBN/ISSN:

9781451859607/1018-5941

Stock No:

WPIEA1892000

Format:

Paper

Pages:

18

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