Working Paper: CEPR ID: DP18598
Authors: David Hemous; Simon Lepot; Thomas Sampson; Julian Schaerer
Abstract: This paper provides a first comprehensive quantitative analysis of optimal patent policy in the global economy. We introduce a new framework, which combines trade and growth theory into a tractable tool for quantitative research. Our application delivers three main results. First, the potential gains from international cooperation over patent policies are large. Second, only a small share of these gains has been realized so far. And third, the WTO’s TRIPS agreement has been counterproductive, slightly reducing welfare in the Global South and for the world. Overall, there is substantial scope for policy reform.
Keywords: No keywords provided
JEL Codes: F10; F13; F55; O33; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| International Cooperation on Patent Policies (O34) | Global Welfare (I31) |
| TRIPS Agreement (F13) | Local Welfare in Global South (I38) |
| Stronger Patent Protection (O34) | Higher Prices (D49) |
| Stronger Patent Protection (O34) | Innovation (O35) |
| Unilateral Deviations from Patent Protection (O34) | Declines in Welfare (I38) |
| Nash Equilibrium (C72) | No Patent Protection (O34) |
| No Patent Protection (O34) | Reductions in Growth (O49) |
| No Patent Protection (O34) | Reductions in Market Power (D49) |