What drives innovation? How does it contribute to the growth of firms, industries, and economies? And do intellectual property rights help or hurt innovation and growth? Uniquely combining microeconomics, macroeconomics, and theory with empirical analysis drawn from the United States and Europe, this book introduces graduate students and advanced undergraduates to the complex process of innovation. By addressing all the major dimensions of innovation in a single text, Christine Greenhalgh and Mark Rogers are able to show how outcomes at the microlevel feed through to the macro-outcomes that in turn determine personal incomes and job opportunities. In four sections, this textbook comprehensively addresses the nature of innovation and intellectual property, the microeconomics and macroeconomics of innovation, and economic policy at the firm and macroeconomic levels. Among the topics fully explored are the role of intellectual property in creating incentives to innovate; the social returns of innovation; the creation and destruction of jobs by innovation; whether more or fewer intellectual property rights would give firms better incentives to innovate; and, the contentious issues surrounding international treaties on intellectual property. Clearly organized and highly readable, the book is designed to be accessible to readers without advanced economics backgrounds. Most technical materials appear in boxed inserts and appendixes, and numerous graphs and tables elucidate abstract concepts. This title provides a comprehensive overview of the economic causes and effects of innovation. It covers microeconomics, macroeconomics, theoretical and empirical analysis, and policy. It includes up-to-date coverage of trends and policy in intellectual property and research and development. It features mathematics appendix and keywords and questions to assist learning and teaching. Lecture slides and outlines of answers to discussion questions are available online.