Joseph Plasmans

Cooperative and non-cooperative fiscal stabilization policies in the EMU

In this paper we analyze the interaction of fiscal stabilization policies in the Economic and Monetary Union (EMU). The ‘Excessive Deficits’ procedure of the Maastricht treaty and its elaborations in the recent ‘Stability and Growth Pact’ introduce a set of fiscal stringency requirements on national fiscal policies. Situations might arise where the need for fiscal flexibility and the fiscal stringency requirements will create a conflict and suboptimal macroeconomic policies are implemented. We analyze macroeconomic adjustment under non-cooperative and cooperative fiscal policy design in the EMU using a dynamic games approach. In particular, we consider how fiscal stringency requirements like the Stability and Growth Pact affect fiscal policy design under EMU and study the consequences of the introduction of a fiscal transfer mechanism between countries.

The (In)Finite Horizon Open-Loop Nash LQ-Game: an Application to EMU

In this paper, we study macroeconomic stabilization in the Economic and Monetary Union(EMU) using a dynamic games approach. In modeling this problem, it turns out that theplayers include the time derivative of the state variable of the game in their performancecriterion. As far as the authors know, this kind of problem has not before been dealt withrigorously in dynamic games theoretic literature. Therefore, we first consider a generalizationof the linear‐quadratic differential game, in which we allow for cross terms in theperformance criteria. Following the analysis of Engwerda [10,12], we present formulas tocalculate open‐loop Nash equilibria for both the finite‐planning horizon and the infinite‐planninghorizon. Particular attention is paid to computational aspects. In the second part ofthis paper, we use the obtained theoretical results to study macroeconomic stabilization inthe Economic and Monetary Union (EMU).

Macroeconomic Policy Interaction under EMU: A Dynamic Game Approach

In this article, we study macroeconomic stabilization in the Economic and Monetary Union (EMU) using a dynamic game approach. With the aid of a stylized macroeconomic model, this article analyzes the transmission and interaction of national fiscal policies and monetary policy of the European Central Bank (ECB) in the EMU. A special focus is on the effects of labor market institutions in the participating countries and of the introduction of fiscal stringency criteria like those imposed in the Stability and Growth Pact.

Measuring knowledge spillovers in the new economy firms in Belgium using patent citations

This paper conducts a comprehensive study of patent citations in patents granted to new economy firms in Belgium by the US and the EU Patent Offices using general qualitative response variable analysis, allowing for asymmetries in size and other characteristics. The citation data studied provide evidence of very industry-specific inter-, intra-firm and inter-, intra-industry knowledge spillovers. No general high-tech or new economy knowledge spillovers pattern was observed in the data. Therefore, we advocate for considering the industry-specific situation when analysing knowledge spillovers in the new economy.

Incentives to cooperate in linear quadratic difference games

Abstract Linked macroeconometric policy models can often be regarded as linear quadratic N-person non-zero-sum difference games. In this paper we study sufficient conditions for the Nash optimal strategies to be Pareto optimal.