Intellectual property rights, technical progress and the volatility of economic growth

► We develop an R&D-based growth model with aggregate uncertainty. ► In this model, we analyze the effects of intellectual property rights on the volatility of economic growth. ► Our model is consistent with the strengthening of patent protection and a reduction in growth volatility in recent decades. ► Our model explains no less than 10% of the observed reduction in growth volatility in the US.