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