A Balance-Sheet Analysis of the Dutch Economy

Ruo Chen

No 2021/255, IMF Working Papers from International Monetary Fund

Abstract: The Dutch economy is characterized by substantial financial balance sheets in the private sector. Uncommonly large gross financial assets and liabilities are found in the financial sector, whereas households own significant net financial wealth. The large gross financial assets and liabilities reflect a dominant role of multinational corporations (MNCs). Despite their size, these financial positions have not brought significant financial stability risks to the country. On the other hand, Dutch households’ long balance sheets have been associated with depressed consumption and volatile real estate investment, which has probably exacerbated the cyclicality of the economy. The expected reform of the pension system is likely to change the way household balance sheets interact with private consumption.

Keywords: balance sheet; financial accounts; multinational corporation; household; pension; net financial assets; gross financial assets; corporation leverage; way household balance sheets interact; cyclicality of the economy; Financial statements; Financial sector; Household consumption; Pension spending; Pensions; Global (search for similar items in EconPapers)
Pages: 22
Date: 2021-10-22
New Economics Papers: this item is included in nep-acc and nep-age
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