Dynamic analysis of patent policy in an endogenous growth model

In this paper, we explore the dynamic properties of an endogenous growth model with finite patent length. We show that there exists a unique equilibrium growth path and that this path exhibits damped oscillations in contrast to the equilibrium path of an endogenous growth model with infinite patent length. We also examine the effects of patent policy on social welfare and show that infinite patent length does not maximize social welfare. Furthermore, we show that, in a growth model that does not exhibit scale effects, a finite patent length maximizes social welfare on the balanced growth path.