Derive the steady-state equilibrium under these conditions

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Consider the model of appropriate technology in Section 18.4.3.

(a) Suppose that now research firms can sell their machines to all producers in the world, including those in the South, and can charge the same markup. Derive the steady-state equilibrium under these conditions.

(b) Comparing your answer in part a to the analysis in the text, derive the implications of IPR enforcement in the South on equilibrium technologies. What are the implications for income per capita differences between the North and the South?

(c) In view of your answer to parts a and b, could it be the case that Southern economies prefer lack of IPR enforcement to full enforcement? [Hint: distinguish between a world in which there is a single Southern country versus one in which there are many.]

(d) What are the implications of IPR enforcement in the South for output and welfare in the North?

Reference no: EM131139695

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