Innovation policy In addition to the use of fiscal and monetary policies to manage business cycle fluctuations, your Policy Brief team is responsible for developing policy recommendations that will expand Australia’s economic productive capacity. Explain what factors can motivate innovation? Provide your policy recommendations on what a government can do to incentivise more innovation in the economy? (2-3 sentences) During the pandemic, pharmaceutical and biotech companies worked intensively to develop a vaccine for COVID-19. In the pharmaceutical and biotech industry, patents and other intellectual property are generally available to private entrepreneurs to encourage and reward this type of innovation. However your team of economists needs to also consider the potential downsides of relying on patents and intellectual property rights to encourage innovation, particularly in the context of the COVID-19 pandemic. Provide your team with an explanation of these potential downsides and risks. (2 sentences) Your Policy Brief team has modelled the effects of an investment in Research & Development (R&D) that leads to the invention of a new production method which makes more efficient use of renewable energy sources. This new production method can be disseminated throughout the economy, bringing down production costs for businesses, and enabling the economy to make more productive use of existing resources. This brings an expansion in the economy’s productive capacity. Illustrate the predicted effects of this innovation using an AD-AS diagram. Provide bullet points to explain what is happening in your diagram. As with all of your diagrams, be sure to indicate the original and new equilibrium points, and what happens to output and price level. To conclude your explanation, explain what is the link between innovation and economic prosperity and wellbeing. Use these bullet points to explain the impacts of this new innovation on the economy, with reference to your AD-AS diagram: … … … … … … 4. The new innovation described in part (c) can assist the economy to transition away from carbon-intensive energy sources such as coal. However, transitioning to renewable energy sources also brings apprehension among workers in coal-mining regions that they will lose their jobs. Suppose you are responsible for designing policies that will encourage innovations that facilitate a shift towards a lower carbon-emissions economy. In your Policy Brief, explain what other policies would you recommend to address concerns about job losses and the wellbeing of these workers. As part of your explanation, identify how these other policies also relate to long-term economic prosperity. (2-3 sentences) 5. What are some of the important inequality and diversity issues that policymakers need to keep in mind when thinking about the role of innovation in the economy more generally? (2-3 sentences)

Innovation policy In addition to the use of fiscal and monetary policies to manage business cycle fluctuations, your Policy Brief team is responsible for developing policy recommendations that will expand Australia’s economic productive capacity. Explain what factors can motivate innovation? Provide your policy recommendations on what a government can do to incentivise more innovation in the economy? (2-3 sentences) During the pandemic, pharmaceutical and biotech companies worked intensively to develop a vaccine for COVID-19. In the pharmaceutical and biotech industry, patents and other intellectual property are generally available to private entrepreneurs to encourage and reward this type of innovation. However your team of economists needs to also consider the potential downsides of relying on patents and intellectual property rights to encourage innovation, particularly in the context of the COVID-19 pandemic. Provide your team with an explanation of these potential downsides and risks. (2 sentences) Your Policy Brief team has modelled the effects of an investment in Research & Development (R&D) that leads to the invention of a new production method which makes more efficient use of renewable energy sources. This new production method can be disseminated throughout the economy, bringing down production costs for businesses, and enabling the economy to make more productive use of existing resources. This brings an expansion in the economy’s productive capacity. Illustrate the predicted effects of this innovation using an AD-AS diagram. Provide bullet points to explain what is happening in your diagram. As with all of your diagrams, be sure to indicate the original and new equilibrium points, and what happens to output and price level. To conclude your explanation, explain what is the link between innovation and economic prosperity and wellbeing. Use these bullet points to explain the impacts of this new innovation on the economy, with reference to your AD-AS diagram: … … … … … … 4. The new innovation described in part (c) can assist the economy to transition away from carbon-intensive energy sources such as coal. However, transitioning to renewable energy sources also brings apprehension among workers in coal-mining regions that they will lose their jobs. Suppose you are responsible for designing policies that will encourage innovations that facilitate a shift towards a lower carbon-emissions economy. In your Policy Brief, explain what other policies would you recommend to address concerns about job losses and the wellbeing of these workers. As part of your explanation, identify how these other policies also relate to long-term economic prosperity. (2-3 sentences) 5. What are some of the important inequality and diversity issues that policymakers need to keep in mind when thinking about the role of innovation in the economy more generally? (2-3 sentences)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Innovation policy

In addition to the use of fiscal and monetary policies to manage business cycle fluctuations, your Policy Brief team is responsible for developing policy recommendations that will expand Australia’s economic productive capacity.

Explain what factors can motivate innovation? Provide your policy recommendations on what a government can do to incentivise more innovation in the economy? (2-3 sentences)
During the pandemic, pharmaceutical and biotech companies worked intensively to develop a vaccine for COVID-19. In the pharmaceutical and biotech industry, patents and other intellectual property are generally available to private entrepreneurs to encourage and reward this type of innovation. However your team of economists needs to also consider the potential downsides of relying on patents and intellectual property rights to encourage innovation, particularly in the context of the COVID-19 pandemic. Provide your team with an explanation of these potential downsides and risks. (2 sentences)
Your Policy Brief team has modelled the effects of an investment in Research & Development (R&D) that leads to the invention of a new production method which makes more efficient use of renewable energy sources. This new production method can be disseminated throughout the economy, bringing down production costs for businesses, and enabling the economy to make more productive use of existing resources. This brings an expansion in the economy’s productive capacity.

Illustrate the predicted effects of this innovation using an AD-AS diagram. Provide bullet points to explain what is happening in your diagram. As with all of your diagrams, be sure to indicate the original and new equilibrium points, and what happens to output and price level. To conclude your explanation, explain what is the link between innovation and economic prosperity and wellbeing.

Use these bullet points to explain the impacts of this new innovation on the economy, with reference to your AD-AS diagram:

4. The new innovation described in part (c) can assist the economy to transition away from carbon-intensive energy sources such as coal. However, transitioning to renewable energy sources also brings apprehension among workers in coal-mining regions that they will lose their jobs.

Suppose you are responsible for designing policies that will encourage innovations that facilitate a shift towards a lower carbon-emissions economy. In your Policy Brief, explain what other policies would you recommend to address concerns about job losses and the wellbeing of these workers. As part of your explanation, identify how these other policies also relate to long-term economic prosperity. (2-3 sentences)

5. What are some of the important inequality and diversity issues that policymakers need to keep in mind when thinking about the role of innovation in the economy more generally? (2-3 sentences)

Figure 1: Illustration of the economic effect of new renewable energy innovation
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