Will Ageing Lead to a Higher Real Exchange Rate for the Netherlands?
AbstractLong-term projections for the Netherlands indicate that demand for nontradables ÃÂ¢Ã¢ÂÂ¬Ã¢ÂÂ e.g. health care services ÃÂ¢Ã¢ÂÂ¬Ã¢ÂÂ will increase relative to supply due to population ageing. If this leads to higher future real exchanges rates this will erode the return of the savings currently made to prepare for ageing. This paper explores the magnitude of potential price effects using a modified version of the âtwo country, four commodity frameworkâ developed by Obstfeld and Rogoff (2005) to explore the exchange rate effects of the balance of payments reversal in the US. When these price effects are substantial, this may have serious consequences for policies to enhance national saving in the Netherlands.
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Bibliographic InfoArticle provided by Springer in its journal De Economist.
Volume (Year): 160 (2012)
Issue (Month): 1 (March)
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Web page: http://www.springerlink.com/link.asp?id=100260
Ageing; Trade balance; Nontradables; Real exchange rate; E60; F41; J11;
Other versions of this item:
- Casper van Ewijk & Maikel Volkerink, 2011. "Will ageing lead to a higher real exchange rate for the Netherlands?," CPB Discussion Paper 197, CPB Netherlands Bureau for Economic Policy Analysis.
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
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