The Effects of Population Growth on Patents and Economic Growth Dynamics

NO : WP-2023-05

AUTHOR : Rudra Narayan Kushwaha and Taniya Ghosh

TITLE :  The Effects of Population Growth on Patents and Economic Growth Dynamics


The paper analyzes how patent-economic growth relationship changes as population dynamics change.
The literature on this relationship has not focused on the role of population growth rate, despite data
showing that countries’ population growth trends have recently shifted from positive to declining and
even negative. We obtain three main results: First, we derive unique growth maximizing patent
protection policies for different population growth scenarios. When the population growth rate is above
(exactly at) the critical value, the growth-maximizing patent breadth is incomplete (complete), with
finite (infinite) patent length. However, when the population growth rate is negative and below the
critical value, then growth-maximizing patent breadth can extend beyond complete. Second, our model
validates Jones (2022)’s Empty Planet result, as the unique growth-maximizing patent protection policy
exists, and thus the steady state per capita output growth exists even with a negative population growth
rate. Third, our model predicts that a country with a lower rate of population growth should have a
more stringent growth-maximizing patent protection policies than others. The findings suggest that
while formulating growth-maximizing patent protection policies, countries should consider shifting
population dynamics.
Keywords: Economic Growth, Overlapping Generations Model, Patents, Physical Capital,
Population, Variety Expansion Model

JEL Code: O31, O34, O40