Will ageing lead to a higher real exchange rate for the Netherlands?

Casper Ewijk and Maikel Volkerink

No 197, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

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 (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.

JEL-codes: E40 F41 J11 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-age
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Journal Article: Will Ageing Lead to a Higher Real Exchange Rate for the Netherlands? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:197

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