Abstract
This study revisits the growth effects of monetary policy, patent breadth, and blocking patents in a monetary Schumpeterian model. In the economy, there are cash constraints on R&D investment and the step size of innovation is endogenous. Within this framework, innovation policies affect economic growth through the arrival rate and the quality size of innovation. We find that with an endogenous innovation size, each of the three innovation policy instruments may have an inverted-U-shaped effect on growth. Moreover, we calibrate the model and quantify the interactive effects of innovation policies. Our results show that the interaction of different innovation policies significantly influences the growth effect of a single policy.
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