Will ageing lead to a higher real exchange rate for the Netherlands?
AbstractLong-term projections for the Netherlands indicate that demand for nontradables Ã¢â¬â e.g. health care services Ã¢â¬â 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 ‘two country, four commodity framework’ 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 InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 197.
Date of creation: Dec 2011
Date of revision:
Other versions of this item:
- Casper Ewijk & Maikel Volkerink, 2012. "Will Ageing Lead to a Higher Real Exchange Rate for the Netherlands?," De Economist, Springer, vol. 160(1), pages 59-80, March.
- 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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