A putty-clay vintage model for sectors of industry in the Netherlands

Summary A putty-clay vintage model has been estimated for five industrial sectors: food, beverages and tobacco manufacturing; textiles, clothing and footwear manufacturing; chemical industry and oil refineries; metal manufacturing, and total manufacturing. Substitutabilityex ante between labour and capital appeared to be small in the first four sectors, with textiles, clothing and footwear manufacturing as an exception. Substitutabilityex ante in total manufacturing industry is rather high: an elasticity of substitution of –0.74. Embodied technical progress is strong in all industrial sectors. In textiles, clothing and footwear manufacturing and in total manufacturing it is both labour- and capital-augmenting in nature. In the other sectors it is mainly of the labour-augmenting variety.This research has partly been made possible by a grant of the National Programme of Labour Market Research (NPAO). Advice by Professor Th. van de Klundert and Mr. A.H. van Zon is gratefully acknowledged.     

Empirical vintage models for the Netherlands: A review in outline

Summary The abundant literature on empirical vintage modelling for the Netherlands is not easily accessible. This article provides a discussion of the main issues covered by that research. Attention is given to (theoretical) model specifications, empirically inspired adjustments and empirical results. The empirical evidence for vintage models appears to be convincing, but it does not seem conclusive with respect to a preference for eitherex ante complementarity orex ante substitutability. Comprehensive modelling for the economy of the Netherlands up to now mainly usesex ante complementarity to describe the production technology. Apart from this, policy implications of such models show a degree of nuance which exceeds but also includes the purely demand oriented approach.     

The demand for money in the Netherlands revisited

Summary This article presents an analysis of demand for money in The Netherlands, both at the aggregate level and the sectoral level. Special attention is devoted to the distinction between short and long run demand. Deviations of the long-run relationships are modelled by means of the error correction mechanism. The elasticities for aggregate demand are consistent with the findings for the money demand by the household and business sectors and correspond reasonably well with those derived from other studies. The estimated equations describe the rise in theM1- andM2-ratio in the 1980s in a satisfactory way, although forM2 from 1987 onwards there is a discrepancy between actual and fitted values. The disaggregated analysis shows that the behaviour of the business sector seems to be responsible for this.The authors are indebted to Professor S.K. Kuipers for his comments on an earlier draft.     

Arrow's significance for economic science in the Netherlands

Summary In the first place, this article presents the information considered necessary to assess the scientific impact of Arrow's work in The Netherlands. Arrow's personal background, his preferred fields of scientific interest, and his methods of inquiry are reviewed and commented upon. The article also addresses the question of how to define and measure scientific impact, and, in order to get a quantitative hold on it for The Netherlands, a numerical experiment is performed. With the help of the information collected in this way, a conclusion is reached, which at first sight is surprisingly negative. Finally, a possible explanation for this conclusion is offered.I wish to thank Ruud Koning, Simon Kuipers, Theo Junius and Bert Schoonbeek for helpful comments and conversations. I would also like to thank the participants in the economics Colloquium AE on December 14, 1989, for their critical remarks and suggestions for improvement. The present version has also benefited from the editor's comments and the English has been improved by Liesbeth de Ruiter. Of course I am responsible for the content of the paper.     

A clay-clay vintage model approach for sectors of industry in Netherlands

Summary To confirm on a more disaggregated level earlier macro-economic studies in the field, an attempt is made in this paper to find out whether a vintage model of the clay-clay type also provides a framework for a plausible explanation of long-run sectoral developments of production capacity, labour requirements and employment. Nine sectors are considered, comprising the total enterprises sector. For this total enterprises sector an (amended) clay-clay vintage model is also (re-)estimated. The results indicate that in the process of adjustments, real labour costs are the strategic variable, though capacity utilization is also recognized as a factor affecting employment directly and indirectly. Projections of employment with the macro vintage model are satisfactory. Specifically, they are more satisfactory than the extrapolations for either manufacturing or non-manufacturing taken separately, and the macro projections compete fairly well with those based on an overall aggregation of employment projections over all nine sectors considered.     

Firm Dynamics and Innovation in the Netherlands A comment on Baumol

There is a growing consensus that entrepreneurship in the Schumpeterian sense plays a significant role in generating sustained rates of productivity growth. Empirical evidence for the role is scarce, owing to the difficulty in finding appropriate measures for such entrepreneurship. This note shows new ways to integrate theory and evidence and reviews some recent empirical evidence on cross-country differences in innovative activity.     

Hysteresis in unemployment in the Netherlands

Summary The Dutch labour market situation in the eighties can be characterized by the hysteresis phenomenon, i. e. a rising natural rate of unemployment as a result of the rise of actual unemployment in the past. It appears that the hysteresis phenomenon is more important in The Netherlands than in France and the United States and as relevant as in Germany and the United Kingdom. Because of the steep rise of unemployment in The Netherlands the natural rate of unemployment may have risen more than in Other European countries. As a consequence, the wage depressing effect of the current high unemployment rate has diminished rapidly.I thank J.C. Siebrand, D.P. Broer and C.B. Mulder for helpful comments on an earlier version of this paper.     

Potential Economic Effects of TTIP for the Netherlands

The transatlantic trade and investment partnership (TTIP) is a comprehensive preferential trade agreement that is expected to significantly increase EU–US bilateral trade and investments. Negotiations are ongoing, so we use a scenario analysis to estimate the potential effects of TTIP under likely negotiated outcomes. In our main scenario, we assume a final trade deal where current tariffs are eliminated and non-tariff barriers are significantly reduced. We simulate the potential economic effects of TTIP using a CGE model. We find that US-Dutch bilateral trade doubles and this is translated into a positive but moderate effect on Dutch income of 1.7%.     

Financing budget deficits in the Netherlands

Summary In The Netherlands public debt management is in the hands of the budgetary policy-maker, whose recourse to the capital market can exceed or fall short of the total borrowing requirement in order to absorb or create liquidity. The conduct of that policy since the early 1960's is analyzed in this paper, emphasizing the importance of medium-term control over the public finances as a prerequisite for the ability of debt management to make a flexible contribution to monetary policy. During the 1960's this condition was satisfied and debt management followed a stable countercyclical pattern which, however, was abandoned after the early 1970's as the public finances swung into substantial disequilibrium.The author thanks J. Boughton, L. Bovenberg, D. Hendry, P. Masson, J. Muellbauer, and the referees for comments on earlier versions. However, the views expressed are his alone and do not necessarily represent those of the International Monetary Fund.     

Financing government spending in the Netherlands

Summary This article addresses the issue of financing government spending from the viewpoint of the Ricardian equivalence theory. After a review of the literature, including a discussion of the underlying assumptions and a comparison with the Keynesian and classical views, we look for empirical evidence for The Netherlands. The empirical results correspond with the findings of many other studies: Ricardian equivalence has to be rejected, although consumers do not completely ignore the government budget constraint. We stress, however, that alternative mechanisms might also be responsible for the empirical findings.Staff members of the Centraal Planbureau, Den Haag and Econometric Research and Special Studies Department, De Nederlandsche Bank NV, Amsterdam. The research project was carried out when the first author was employed at De Nederlandsche Bank. The authors are indebted to J. Pen, M.M.G. Fase, W.C. Boeschoten and A.P. Ros for their valuable comments on an earlier draft.     

Trends in Wage Inequality in the Netherlands

De Economist - In this paper I analyze changes in the wage distribution in the Netherlands. I use a matched employer-employee dataset that covers the population of employees. Wage inequality...     

Output and employment growth in the Netherlands in the postwar period: A putty-clay approach

Summary An attempt has been made to estimate a putty-clay vintage model for the Netherlands in order to test the assumption, usually made in the Dutch vintage model discussion, of complementarity ex ante. The estimation led to the following conclusions: an elasticity of substitution of about 0.32, a planning period of 13 years and apart from the 1950s the existence of embodied labour-augmenting technical progress only. The model outcomes lead to the conclusion of capital shortage being the ruling phenomenon in the postwar period with only some short periods in the 1950s and the late-1960s of capital abundance. Since the late-1970s employment growth is not only depressed by too slow a growth of capacity demand for labour but also by the increasing underutilization of productive capacity. Part of this research has been made possible by a grant of the Netherlands Organization for the Advancement of Pure Research (ZWO) and the National Programme of Labour Market Research (NPAO). The authors are indebted to Professor Th. van de Klundert for valuable comments.     

Corporate Effective Tax Rates in the Netherlands

Summary This paper investigates the actual size of tax incentives granted to Dutch companies by using financial statement data for 1592 companies for the 1994--1999 period. Empirical results indicate that Dutch effective tax rates do not differ much from statutory tax rates. Although capital intensity is negatively associated with effective tax rates, only a small portion of the variance in effective tax rates can be explained. This indicates that the actual size of tax incentives granted to companies in the Netherlands is quite small.Comments by the editor, two anonymous reviewers, Willem Buijink, Yvonne Schols and participants at the annual European Accounting Association congress are gratefully acknowledged.     

Measuring and Analysing Competition in the Netherlands

This article analyses the developments of competition between 1993 and 2001 at the industry level. Using the relative profits measure and the price-cost margin based on firm-level data, these competition indicators suggest that competition did not increase in most industries but diverged widely. This is puzzling in light of the regulatory reforms to enhance competition. An econometric analysis suggests that regulatory reforms indeed intensified competition, but also that considerable growth of market demand may have weakened competition. Finally, the two indicators often point in the opposite direction for the development of competition, because they respond differently to a reallocation of output from inefficient to efficient firms.