Greenspan said another problem was that new ideas, which he called the “building blocks of intellectual property,” almost always build on old ideas in ways that are difficult or impossible to trace.
To try and maximize economic growth, Greenspan said it was important to strike the right balance in the protection of intellectual property rights.
“Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation?” he asked. “Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital?”
[…] He said it was also important for economists to study how the development of ideas affects economic growth but cautioned that research in this area would not be easy.
Even a seemingly straightforward issue such as examining how the length of a patent, Greenspan said, might effect economic growth posed “formidable challenges.”
But he urged economists to press forward with such research.
“We must begin the important work of developing a framework capable of analyzing the growth of an economy increasingly dominated by conceptual product,” he said.