Products, patents and productivity persistence: A DSGE model of endogenous growth

Holden, T (2011) Products, patents and productivity persistence: A DSGE model of endogenous growth . (Unpublished)

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Abstract

This paper builds a dynamic stochastic general equilibrium (DSGE) model of endogenous growth that is capable of generating substantial degrees of endogenous persistence in productivity. When products go out of patent protection, the rush of entry into their production destroys incentives for process improvements. Consequently, old production processes are enshrined in industries producing non-protected products, resulting in aggregate productivity persistence. Our model also generates sizeable delayed movements in productivity in response to preference shocks, providing a form of endogenous news shock. Finally, if we calibrate our model to match a high aggregate mark-up then we can replicate the negative response of hours to a positive technology shock, even without the inclusion of any frictions.

Item Type:	Other
Divisions :	Surrey research (other units)
Authors :	Holden, T
Date :	1 May 2011
Uncontrolled Keywords :	productivity persistence, patent protection, oligopoly, research and development
Related URLs :	Author
Depositing User :	Symplectic Elements
Date Deposited :	28 Mar 2017 14:41
Last Modified :	23 Jan 2020 09:50
URI:	http://epubs.surrey.ac.uk/id/eprint/427918

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