The deposit financing gap: Another Dutch disease
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: 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 a... Mehr ...
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Dokumenttyp: | Buch |
Erscheinungsdatum: | 2014 |
Verlag/Hrsg.: |
UNU-MERIT
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Sprache: | Englisch |
Permalink: | https://search.fid-benelux.de/Record/base-26664598 |
Datenquelle: | BASE; Originalkatalog |
Powered By: | BASE |
Link(s) : | https://cris.maastrichtuniversity.nl/en/publications/c95787da-f5ba-4a77-ab23-8aebe62d285b |
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: 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.