IDEAS home Printed from https://ideas.repec.org/p/unm/unumer/2014071.html
   My bibliography  Save this paper

The deposit financing gap: Another Dutch disease

Author

Listed:
  • Meijers, H.

    (SBE, Maastricht University, UNU-MERIT)

  • Muysken, J.

    (SBE, Maastricht University)

  • Sleijpen, O.

    (SBE, Maastricht University)

Abstract

In the last two decades the Netherlands have 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 as 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. In this paper we argue that traditional macroeconomic models cannot analyse this phenomenon appropriately since 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 and we use this approach to analyse the deposit financing gap for the Netherlands.

Suggested Citation

  • Meijers, H. & Muysken, J. & Sleijpen, O., 2014. "The deposit financing gap: Another Dutch disease," MERIT Working Papers 2014-071, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2014071
    as

    Download full text from publisher

    File URL: https://unu-merit.nl/publications/wppdf/2014/wp2014-071.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. International Monetary Fund, 2011. "Mauritius: 2011 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2011/096, International Monetary Fund.
    2. International Monetary Fund, 2011. "Bolivia: 2011 Article IV Consultation-Staff Report; Supplement and Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Bolivia," IMF Staff Country Reports 2011/124, International Monetary Fund.
    3. International Monetary Fund, 2011. "South Africa: 2011 Article IV Consultation - Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for South Africa," IMF Staff Country Reports 2011/258, International Monetary Fund.
    4. International Monetary Fund, 2011. "Republic of Slovenia: 2011 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; Staff Statement; and Statement by the Executive Director for Slovenia," IMF Staff Country Reports 2011/121, International Monetary Fund.
    5. International Monetary Fund, 2011. "Cambodia: 2010 Article IV Consultation-Staff Report; Staff Statement and Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Cambodia," IMF Staff Country Reports 2011/045, International Monetary Fund.
    6. International Monetary Fund, 2011. "Montenegro: 2011 Article IV Consultation-Staff Report; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Montenegro," IMF Staff Country Reports 2011/100, International Monetary Fund.
    7. International Monetary Fund, 2011. "Kingdom of the Netherlands: Curaçao and Saint Maarten: 2011 Article IV Consultation: Staff Report; Informational Annex; and Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2011/342, International Monetary Fund.
    8. International Monetary Fund, 2011. "Japan: 2011 Article IV Consultation: Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion," IMF Staff Country Reports 2011/181, International Monetary Fund.
    9. International Monetary Fund, 2011. "United Kingdom: 2011 Article IV Consultation: Staff Report; Staff Supplement; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for ," IMF Staff Country Reports 2011/220, International Monetary Fund.
    10. International Monetary Fund, 2011. "Maldives: 2010 Article IV Consultation: Staff Report; Staff Statement and Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Maldives," IMF Staff Country Reports 2011/293, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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).
    3. 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).
    4. 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).
    5. 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.
    6. 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).
    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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matti Ylönen, 2017. "Policy diffusion within international organizations: A bottom-up analysis of International Monetary Fund tax work in Panama, Seychelles, and the Netherlands," WIDER Working Paper Series 157, World Institute for Development Economic Research (UNU-WIDER).
    2. Matti Ylönen, 2017. "Policy diffusion within international organizations: A bottom-up analysis of International Monetary Fund tax work in Panama, Seychelles, and the Netherlands," WIDER Working Paper Series wp-2017-157, World Institute for Development Economic Research (UNU-WIDER).
    3. Raquel Almeida Ramos, 2012. "Financial Flows and Exchange Rates: Challenges Faced by Developing Countries," Working Papers 97, International Policy Centre for Inclusive Growth.
    4. Lord, Montague, 2011. "Lao PDR Resource-Led Export Growth," MPRA Paper 61062, University Library of Munich, Germany.
    5. Michal Andrle, 2013. "What Is in Your Output Gap? Unified Framework & Decomposition into Observables," IMF Working Papers 2013/105, International Monetary Fund.
    6. Jean-Pierre Andre, 2011. "Economic Imbalances: New Zealand's Structural Challenge," Treasury Working Paper Series 11/03, New Zealand Treasury.
    7. Jayaraman, T. K. & Choong, Chee-Keong, 2011. "Impact of exchange rate changes on domestic inflation: a study of a small Pacific Island economy," MPRA Paper 33719, University Library of Munich, Germany.
    8. Andrea Kendall-Taylor, 2012. "Purchasing Power: Oil, Elections and Regime Durability in Azerbaijan and Kazakhstan," Europe-Asia Studies, Taylor & Francis Journals, vol. 64(4), pages 737-760.

    More about this item

    Keywords

    Real-estate prices; Mortgages; Household savings; Retail funding gap; Macroeconomic models; Stock-flow consistent approach; Netherlands;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2014071. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ad Notten (email available below). General contact details of provider: https://edirc.repec.org/data/meritnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.