Market for Ideas and Economic Growth

An endogenous growth model is developed where each period …rms invest in researching and developing new ideas. An idea increases a …rm’s productivity. By how much depends on how central the idea is to a …rm’s activity. Ideas can be bought and sold on a market for patents. A …rm can sell an idea that is not relevant to its business or buy one if it fails to innovate. The developed model is matched up with stylized facts about the market for patents in the U.S. The analysis attempts