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465 - The Dutch current account balance and net international investment position

Author(s): Windy Vandevyvere

The Dutch current account balance and net international investment positionpdf(2 MB) Choose translations of the previous link 

Summary for non-specialistspdf(91 kB) Choose translations of the previous link 

The Netherlands is almost a textbook-case of an open economy that is highly integrated in the world economy in terms of both financial flows and trade. Its current account has been persistently in surplus for over three decades and the surplus is one of the highest as in percentage of GDP of the euro area. A key issue that stands out is the shift in sectoral savings balances that has taken place since 2001, with non-financial corporations instead of households becoming the main contributors to the surplus. This shift to a large extent reflects the pivotal role played by the housing market in shaping the balance sheet of Dutch households, which have piled up substantial residential mortgage debt. At the same time, profits received from foreign affiliates have spurred the savings of non-financial corporations. Arguably, the size of financial inflows and outflows and the concurrent structure of assets and liabilities have made the Dutch economy more sensitive to valuation changes and the whims of international capital markets.

(European Economy. Economic Papers 465. October 2012. Brussels. PDF. 33pp. Tab. Graph. Ann. Free.)

KC-AI-12-465-EN-N (online)
ISBN ISBN 978-92-79-22986-2 (online)
doi: 10.2765/27352 (online)

JEL classification: E21, E22, E24, E61, F1, G1, J3

Economic Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The views expressed are the author’s alone and do not necessarily correspond to those of the European Commission.

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