The deposit financing gap: another Dutch disease
In the last 2 decades, the Netherlands has 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: 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. Traditional macroeconomic models cannot analyse this phenomenon appropriately as they lack a proper model of the financial sector and underestimate the potential f... Mehr ...
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Dokumenttyp: | Artikel |
Erscheinungsdatum: | 2015 |
Reihe/Periodikum: | European Journal of Economics and Economic Policies: Intervention ; volume 12, issue 1, page 32-50 ; ISSN 2052-7764 2052-7772 |
Verlag/Hrsg.: |
Edward Elgar Publishing
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Schlagwörter: | Economics and Econometrics / Finance |
Sprache: | unknown |
Permalink: | https://search.fid-benelux.de/Record/base-26622021 |
Datenquelle: | BASE; Originalkatalog |
Powered By: | BASE |
Link(s) : | http://dx.doi.org/10.4337/ejeep.2015.01.05 |
In the last 2 decades, the Netherlands has 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: 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. Traditional macroeconomic models cannot analyse this phenomenon appropriately as 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, enabling us to analyse the deposit financing gap for the Netherlands.