A proper welfare evaluation requires knowledge of the effects of tighter IPRs on the entire trajectory of g and ζ, and not only on their steady state values (see Diamond [1981] and Judd [1982]). We turn now to this calculation. I restrict the analysis to economies that are initially in steady state; namely, ζ(0)=ζ ̅. For economies of this type we can calculate the first order response of (g,ζ) to a tightening of intellectual property rights from a linearized version of the differential equations (24) and (25) around their steady state values: The linearized system is