In Economic Growth and particularly dynamic optimization. My professor taught us that an intertemporal allocation is a dynamic optimum(Pareto Optimum) only if(necessary condition) at any given instance it is a stationary(instant, contemporary) optimum.
I questioned about patents. We are sacrificing the present for R&D. We are creating a monopoly to give incentives for R&D. So obviously it cannot be at present, instantly pareto optimal. Nonetheless couldn't patents help? Since probably they give incentives for R&D?
The professor replied saying that this is exactly why some researchers in Industrial Organization defy, question patents and their benefits.
Could pharmaceuticals work just as well or even better with no patents? In work just as well I mean the intensity of the incentives for R&D.