Intellectual property rights protection and endogenous economic growth revisited

An analytical solution to the lab-equipment growth model (Rivera-Batiz and Romer, 1991) with an exogenous imitation rate is presented and applied to study the policy tradeo ¤ between weaker levels of intellectual property rights (IPR) protection yielding more consumption today, and stronger levels yielding more growth tomorrow. This has already been studied in Kwan and Lai (2003); however, a mistake in writing out the dynamics of the problem has contaminated that analysis. For the whole parame-ter space considered there, the conclusion is no longer to strengthen IPR protection partially, but fully. The tradeo ¤ persists, though, for di¤erent choices of parameters