Debasis Mondal

Product development, imitation and economic growth: A note

Abstract A dynamic North – South general equilibrium model of international product cycle is presented in this paper. The qualitative effects of strengthening intellectual property rights (IPR) on the balanced growth rate of the world economy is studied in two alternative cases: (i) imitation is direct from North to South; (ii) multinationalization is the channel of product transfer.

Private provision of public good and immiserizing growth

This paper develops a simple R&D driven endogenous growth model with a public good financed by private contributions. I show that a larger endowment of population or resources can be immiserizing for the economy as a whole. With a larger population, the economy grows at a higher rate but per-capita income from asset holdings falls unambiguously. Since people voluntarily contribute a part of their instantaneous income toward the public good, reduced asset income may lead to lower level of provision of the public good. This brings in the possibility of immiserizing growth where higher rate of growth is associated with lower level of welfare. I also show that the socially optimum level of public good provision may well fall below the equilibrium level and that the problem of underprovision of the public good need not be aggravated in larger economies.

Private Giving in Higher Education

Why private giving in higher education in the USA by alumni and top philanthropists are significant but almost non-existent in a country like India? Introducing a public good (higher education) in Krugman’s (Krugman, J Int Econ, 9:469–479, 1979) model, we examine this dichotomy. In a country with a lower population base, the unit cost of production of the private good tends to be higher, and hence the price of giving lower, making public good much more attractive. The resulting per capita welfare in the two countries will likely differ. If national border control were removed, migration should equate per capita welfare with population in the two regions split even when private good technology exhibits economies of scale, unlike Krugman’s agglomeration hypothesis. Further, it is possible that per capita welfare turns out to be higher with the entire population situated in the more costly region with a higher price of the private good but higher overall provision of the public good. In Krugman’s world (without the public good), this is never possible.