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The deposit financing gap: another Dutch disease

Author

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  • Huub Meijers

    (Department of Economics, SBE, Maastricht University, and UNU-MERIT, Maastricht, the Netherlands)

  • Joan Muysken

    (Department of Economics, SBE, Maastricht University, CofFEE Europe, and UNU-MERIT, Maastricht, the Netherlands)

  • Olaf Sleijpen

    (Department of Economics, SBE, Maastricht University, Maastricht, and De Nederlandsche Bank, Amsterdam, the Netherlands)

Abstract

In the last 2 decades, the Netherlands has experienced an increase in real-estate prices, accompanied by an increase in mortgages and a marked decline in household savings. As a consequence, banks are faced with a large retail funding gap: outstanding mortgage debt is insufficiently matched by retail deposits, whereas other funding possibilities of banks have increasingly been constrained – also due to their large foreign exposures. Traditional macroeconomic models cannot analyse this phenomenon appropriately as they lack a proper model of the financial sector and underestimate the potential for interactions between the monetary and the real sphere. We present a stock-flow consistent approach developed by Godley and Lavoie as a valuable alternative to traditional and New Keynesian macroeconomic models, enabling us to analyse the deposit financing gap for the Netherlands.

Suggested Citation

  • Huub Meijers & Joan Muysken & Olaf Sleijpen, 2015. "The deposit financing gap: another Dutch disease," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 12(1), pages 32-50, April.
    • Handle: RePEc:elg:ejeepi:v:12:y:2015:i:1:p32-50
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    Citations

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    Cited by:

    1. Detzer, Daniel, 2016. "Financialisation, debt and inequality: Scenarios based on a stock flow consistent model," IPE Working Papers 64/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Mikael Randrup Byrialsen & Hamid Raza, 2022. "Household debt and macroeconomic stability: An empirical stock‐flow consistent model for the Danish economy," Metroeconomica, Wiley Blackwell, vol. 73(1), pages 144-197, February.
    3. Daniel Detzer, 2017. "Financialisation, Debt and Inequality: Export-led Mercantilist and Debt-led Private Demand Boom Economies in a Stock-flow consistent Model," Working Papers 2016-03, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    4. Meijers, Huub & Muysken, Joan, 2022. "The macroeconomic implications of financialisation on the wealth distribution," MERIT Working Papers 2022-035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Meijers, Huub & Muysken, Joan, 2016. "The impact of quantitative easing in the Netherlands: A stock-flow consistent approach," MERIT Working Papers 2016-067, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Muysken, Joan & Bonekamp, Bas & Meijers, Huub, 2017. "Stock-flow consistent data for the Dutch economy, 1995-2015," MERIT Working Papers 2017-045, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Muysken, Joan & Meijers, Huub, 2022. "Globalisation and financialisation in the Netherlands, 1995 - 2020," MERIT Working Papers 2022-006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    More about this item

    Keywords

    stock-flow consistent modelling; retail funding gap; mortgage financing;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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