nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2014‒09‒29
three papers chosen by
Iulia Igescu
Ministry of Presidential Affairs

  1. Science, Innovation and National Growth By Thomas Brenner
  2. Optimal patent breadth in a horizontal innovation growth model By Reinan Ribeiro; David Turchick
  3. The Growth-Inflation Nexus for the US over 1801-2013: A Semiparametric Approach By Mehmet Balcilar; Rangan Gupta; Charl Jooste

  1. By: Thomas Brenner (Economic Geography and Location Research, Philipps-University, Marburg)
    Abstract: This paper studies the effects of public research (publications) and innovation output (patents) on national economic growth with the help of a GMM panel regression including 114 countries. Effects on productivity growth and capital and labor inputs are distinguished. Furthermore, different time lags are examined for the various analyzed effects and two time periods as well as less and more developed countries are studied separately. The results confirm the effect of innovation output on productivity for more developed countries. Simultaneously, innovation output is found to have negative impacts on capital and labor inputs, while public research is found to have positive impacts on labor inputs.
    Keywords: national growth, innovation, public research, growth
    JEL: O11 O31 E10 C23
    Date: 2014–09–14
  2. By: Reinan Ribeiro; David Turchick
    Abstract: Patenting and licensing are introduced into the lab-equipment horizontal innovation model of endogenous growth. Patent length is not deterministic, in that patent holders' market power will collapse if and only if their patented goods get successfully imitated. The model is solved in an exact fashion. Consideration of static and dynamic inefficiencies shows that optimal intellectual property rights protection entails maximal patent length, but nonmaximal patent breadth. By fixing a lower patent breadth level, government is able to trade off a modest negative long-term effect on growth for a substantial positive short-term effect on consumption. A third potential source of inefficiency, reputational, is also considered.
    Keywords: intellectual property rights; horizontal innovation; lab-equipment model; growth; patent length; patent breadth.
    JEL: L13 O31 O34 O41
    Date: 2014–09–08
  3. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10, Turkey); Rangan Gupta (Department of Economics, University of Pretoria); Charl Jooste (Department of Economics, University of Pretoria)
    Abstract: We try and detect whether there exists a threshold level of inflation for the US economy over 1801-2013, beyond which it has a negative effect on economic growth. We use a combination of nonparametric (NP) and instrumental variable semiparametric (SNP-IV) methods to obtain inflation thresholds for the United States. The results suggest that the relationship between growth and inflation is hump shaped—that higher levels of inflation reduce growth more. Our results consistently show that inflation above two per cent negatively affects growth.
    Keywords: Inflation, growth, nonparametric, semiparametric
    JEL: E31 O49 C14
    Date: 2014–09

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