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De Economist

, Volume 160, Issue 1, pp 59–80 | Cite as

Will Ageing Lead to a Higher Real Exchange Rate for the Netherlands?

  • Casper van Ewijk
  • Maikel Volkerink
Open Access
Article

Abstract

Long term projections for the Netherlands indicate that demand for nontradables—e.g. health care services—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 (Brookings Papers Econ Activity 1:67–146, 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.

Keywords

Ageing Trade balance Nontradables Real exchange rate 

JEL Classification

E60 F41 J11 

Notes

Open Access

This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

Supplementary material

10645_2011_9182_MOESM1_ESM.docx (29 kb)
ESM 1 (DOCX 30 kb)

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Copyright information

© The Author(s) 2012

Authors and Affiliations

  1. 1.CPB Netherlands Bureau for Economic Policy ResearchNetspar and University of AmsterdamAmsterdamThe Netherlands
  2. 2.SEO Economic ResearchAmsterdamThe Netherlands

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