This paper explores how the imitation detection and tax (or subsidy) policies affect the innovation, imitation and economic growth. We find that the severer patent protection and the production subsidy and sales tax on intermediate firms decrease the profit in research sector, further, lead to a lower rate of innovation and retard economic growth. On the other hand, we show these policies effect on wage rate. The patent protection policy has ambiguous effect on wage rate. The production subsidy raises the wage rate whereas the sales tax has negative effect on that.