The Political Economy of the Subprime Mortgage Credit Expansion

National Bureau of Economic Research, Inc, NBER Working Papers 01/2010; DOI: 10.2139/ssrn.1623004
Source: RePEc

ABSTRACT This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.

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    ABSTRACT: Politicians’ capability to direct market access puts them at the heart of a struggle between entrepreneurs for preferential access to a protected market. Using a single political economy framework we study how interest groups are formed to jointly offer political contributions in exchange for such preferential access. The effectiveness of these offers depends on the political influence of consumers who suffer from reduced production. In three chapters we closely examine differences in group formation under lobbying or bribing, the effects of bank ownership on the level of entry and financial stability, and the possibility that politicians favour entry of core constituents independent of their efficiency.

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