Research

This page summarizes my research activities in the three parts: Research in Progress, Intellectual Contributions, and Referee Service upon Journal Editor’s Invitation.

Research in Progress

Project 1: The Socially Optimal Design of Amortizing Innovation-Backed Securities

Project 2: In search of the Globally Optimal Shape of Patents for the North and South

Project 3: Deep Learning, Functional Differential Equations, and Macroeconomic Dynamics

Intellectual Contributions

My academic research profile is reflected in the publication page. For most of my research work, I apply computational modeling to dynamic macroeconomic systems for policy analysis. My purpose is to seek ways to improve the economic well-being of humanity by means of government policies directed towards patent reform, technological innovation and diffusion, economic growth, international trade, international finance, and the distribution of economic interests between developed and developing countries.

In my view, some of my academic research represents a trailblazing contribution to the economics literature, as summarized below:

1. The forward-rate target zone

I developed a stochastic model to construct the forward-rate target zone and showed that monetary authorities can stabilize the spot exchange rate by building a target zone for the associated forward exchange rate; see Lin (2008).

2. The intertemporal-bounty arrangement

I pioneered research into a novel reward mechanism coined “Intertemporal Bounty” to function as an alternative to the patent system. I simulated the net welfare gain by replacing patents with intertemporal bounties, respectively, for four selected drug sectors in the United States in Grinols and Lin (2011) and for a calibrated US economy in Lin (2016).

3. The amortizing innovation-backed securities

I innovated a special class of amortizing securities coined “Innovation-Backed Securities” (IBS) to work as a Pareto-efficient alternative to patents. Building on the idea of intertemporal bounties, the socially optimal design for this special class of securities has been worked out in two dimensions (payout ratio vs. payout term) in Lin (2020).

4. Region-specific needs and North-South protection of IPRs

I and my coauthor Earl Grinols pioneered the development of a dynamic North-South model by incorporating the critical elements of region-specific needs and bidirectional R&D and overturned the once-powerful conclusion by the seminal work Helpman (1993); see Grinols and Lin (2006). Later, my extensive work modifies the North-South policy perspective of both Helpman (1993) and Grinols and Lin (2006) by introducing creative destruction and using a better dynamic-system algorithm; see Lin (2025).

5. Finite-length patents and the dynamical system of MFDEs

For the sake of tractability, many economists presume infinite-length patents for their R&D-based endogenous growth models. Patents have a finite term of 20 years in the real world, however. I allowed “finite-length patents” to enter the Romer/Jones-type growth model and showed that the general-equilibrium dynamical system is no longer formed by a system of ordinary differential equations (ODEs). Rather, the system is seen to become a complicated set of mixed-type functional differential equations (MFDEs); see Lin and Shampine (2018). Furthermore, My coauthor and I developed a novel relaxation algorithm that can solve the system of MFDEs. This algorithmic mechanism also proves workable in solving another system of MFDEs for the “time-to-build” growth model; see Lin (2018). This contribution can resolve a critical computational problem that has bothered economists for decades.

6. Dynamic modeling of a three-country model (North, South, and the Middle)

To the best of my knowledge, I developed the first-ever dynamic three-country model in the North-South trade/growth literature. This work expands the policy perspective, respectively, for the developing world, the developed world, and the middle-income world. Numerical simulations show that the middle economy always finds a need to socially optimize investing balance between imitative R&D and South-bound FDI; see Lin (2010).

7. Tax policies for R&D-based endogenous growth

I was one of the few pioneering economists in the 1990s who Incorporated the particular features of the U.S. tax code, notably corporate interest deductions and R&D expensing, into Romer’s R&D-based endogenous growth model; see Lin and Benjamin (1999). This work obtains a surprising finding that a pro-growth tax system requires a lower income tax rate for non-innovative firms.

8. Monopolistic competition, intra-industry trade, and export subsidies

In the context of intra-industry trade, I identified a new welfare-enhancing role for the policy of export subsidization and showed that coordinating bilateral export subsidies to counteract consumption distortions under monopolist competition can be both nationally and globally welfare improving. Moreover, I can compute in a general equilibrium two-country framework a structurally determined coordination ‘range’ to inform domestic and foreign governments; see Lin (1996).

Remarks: The foremost implication of my long-term research is that the world’s patents (or medical patents, in particular) should be superseded by a special class of amortizing securities coined “Innovation-Backed Securities” (IBS) that I have designed. Patents are always suboptimal, but my proposed IBS can be a socially optimal alternative.

Referee Service upon Journal Editor’s Invitation

The following journals that I had ever served as a referee are arranged alphabetically:

• American Economic Review
• Asian Journal of Economics
• Bulletin of Economic Research
• Computational Economics
• Economic Issues
• Economic Modelling
• European Economic Review
• Health Economics
• International Economic Journal
• International Review of Economics and Finance
• International Symposia in Economic Theory and Econometrics
• Journal of Economic Integration
• Journal of Economic Theory
• Journal of Economics and Business
• Journal of International Money and Finance
• Journal of International Trade & Economic Development
• Journal of Macroeconomics
• Macroeconomic Dynamics
• Review of Economic Studies
• Southern Economic Journal