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

PIER Working Paper No. 13-069

51 Pages Posted: 16 Dec 2013

See all articles by Ufuk Akcigit

Ufuk Akcigit

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); Center for Economic and Policy Research (CEPR)

Murat Alp Celik

University of Toronto - Department of Economics

Jeremy Greenwood

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

There are 2 versions of this paper

Date Written: December 12, 2013

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.

Keywords: Growth, Ideas, Innovation, Misallocation, Patents, Patent Agents, Research and Development, Search frictions

JEL Classification: O31, O41

Suggested Citation: Suggested Citation

Akcigit, Ufuk and Celik, Murat Alp and Greenwood, Jeremy, Buy, Keep or Sell: Economic Growth and the Market for Ideas (December 12, 2013). PIER Working Paper No. 13-069, Available at SSRN: https://ssrn.com/abstract=2368232 or http://dx.doi.org/10.2139/ssrn.2368232

Ufuk Akcigit (Contact Author)

University of Chicago - Department of Economics ( email )

1126 E. 59th St
Chicago, IL 60637
United States

HOME PAGE: http://www.ufukakcigit.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Center for Economic and Policy Research (CEPR) ( email )

London
United Kingdom

Murat Alp Celik

University of Toronto - Department of Economics ( email )

150 St. George St.
Toronto, ON M5S 3G7
Canada

HOME PAGE: http://muratcelik.faculty.economics.utoronto.ca/

Jeremy Greenwood

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-1505 (Phone)

HOME PAGE: http://jeremygreenwood.net

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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