## Long-Term Trends in the Saving-Investment Balance and Persistent Current Account Surpluses in a Small Open Economy: The Case of the Netherlands

_IMF Working Papers, May 1, 1996_

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## Bibliographic details
- Authors: Ioannis Halikias
- Published: May 1, 1996
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451975772.001

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### Overview
- Paper explores, from an investment-saving perspective, factors underlying the persistent widening of the current account surplus in the Netherlands since the early 1980s.
- Standard intertemporal models, even when extended to incorporate specific Dutch features, do not fully account for the observed widening.
- The paper therefore focuses on the production side of the economy to gain further insight into trends in the current account.

### Main empirical findings
- Empirical evidence suggests that the bulk of the observed widening of the current account surplus is accounted for by:
  - changes in relative factor prices, and
  - a relative demand shift toward non-tradable goods.
- The impact of these factors on the current account appears to reflect:
  - changes in factor proportions, and
  - deviations from perfect competition in the Dutch sheltered sector.

### Analytical approach and scope
- Perspective: investment-saving (saving-investment) balance.
- Comparison: standard intertemporal models versus production-side analysis.
- Emphasis on production-side mechanisms when intertemporal models are insufficient to explain persistent surplus widening.

### Subjects and keywords (as listed in the source)
- Subject: Balance of payments, Current account, Current account surpluses, Labor, Production, Real wages, Total factor productivity, Wages
- Keywords: Current account, Current account surpluses, Global, investment-saving ratio, Netherlands saving, perfect competition, persistent current, Real wages, saving rate, saving-investment balance, saving-investment ratio, Total factor productivity, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/long-term-trends-in-the-saving-investment-balance-and-persistent-current-account-surpluses-in-2032_