Martijn I. Dröes

Do Floods Have Permanent Effects? Evidence from the Netherlands

This study investigates the short- and long-run impact on population dynamics of the major flood in the Netherlands in 1953. A dynamic difference-in-differences analysis reveals that the flood had an immediate negative impact on population growth, but limited long term effects. In contrast, the resulting flood protection programme (Deltaworks), had a persisting positive effect on population growth. As a result, there has been an increase in population in flood prone areas.

Inter-Regional Spillovers of Seaports: The Case of North-West Europe

Ports are essential for global trade, but there are growing concerns about their impacts on the local economy. Insight in these local economic impacts of ports and inter-regional spillovers is crucial for future investment decisions and local acceptance of port development. Inter-regional spillovers from port activities are commonly assumed in the academic literature on port economics, but rarely ever quantified. This article fills this gap by quantifying the backward linkages of four large ports in North- West Europe : Rotterdam, Antwerp, Hamburg and Le Havre. To assess the extent and distribution of inter-regional economic spillovers, we disaggregate national input/outputtables to the level of the functional port area and calculate the relevant Leontief multipliers. The results in this paper suggest a wide range of Leontief multipliers with different inter-regional patterns. The ports of Rotterdam and Antwerp have smaller overall multipliers but relatively large impacts on their own regional economies, in particular on the petro-chemical sector. In contrast, the ports of Hamburg and Le Havre have higher overall multipliers and show relatively high impacts on regions further away from the port, such as Bavaria and Ile-de-France. The policy implications of these results are discussed.

Credit Constraints and Price Expectations of Homeowners

This paper examines the effect of credit constraints on the sale price expectations of homeowners. We extend the results of Genesove and Mayer (1997) by using a sample of mover and non-mover families living in the Netherlands—a country without formal down-payment requirements. We find that homeowners who are more credit constrained expect to sell their house for a higher price. Homeowners already seem to compensate for credit constraints at the very first stages of the transaction process. These results imply that the findings of Genesove and Mayer (1997) are much more generally applicable than previously considered.

What Causes the Positive Price-Turnover Correlation in European Housing Markets

This paper examines what determines the correlation between prices and turnover in European housing markets. Using a panel vector auto-regressive model, we find that there is a particularly strong feedback mechanism between prices and turnover. Momentum effects are another important reason why prices and turnover are correlated. Common underlying factors, such as GDP and interest rates, also explain part of the price�?turnover correlation. The results in this paper imply that, to understand price and turnover dynamics, it is important to model prices and turnover as two interdependent processes. Ignoring this inter-dependency results in a considerable bias in the coefficient estimates of both price and turnover models.

Quantitative Easing and Exuberance in Government Bond Markets: Evidence from the ECB's Expanded Asset Purchase Program

This paper examines the impact of Quantitative Easing (QE) in the Eurosystem on government bond yields and to what extent QE is causing government bond prices to deviate from their fundamental determinants. We apply a novel recursive estimation procedure developed by Phillips et al. (2015) to examine the existence of exuberant price behavior. The results show that government bond markets experienced exuberant price behavior in Euro Area countries following the announcement and implementation of several QE programs in 2014 and 2015. Especially the Public Sector Purchase Program (PSPP) contributed to exuberant price behavior as all countries experienced a divergence between observed and fundamental yield levels. However, almost no evidence of exuberance in government bond markets is found when QE policies are treated as drivers of government bond yields in addition to the traditional determinants. Given the influence of QE on government bond yields and prices, our findings imply that caution is warranted when this policy is eventually reversed.

The Productivity of Public Capital in the Netherlands: A Regional Perspective

This paper investigates on the impact of public capital on production in the Netherlands from a regional perspective. Based on a simple growth accounting exercise, the results indicate that investment in public capital contributed 17–21% to economic growth in the Netherlands between 1971 and 2000. In addition, the regression estimates suggest that a one percentage point increase in public capital accumulation increased economic growth by 0.37 percentage points, but this effect could be as high as 0.82 percentage points in the periphery of the Netherlands. We find that total factor productivity was one of the most important determinants of regional economic growth. In the period 1971–2000, the contribution of total factor productivity growth to economic growth was between 39 and 52% based on the growth accounting method. In addition, regression analysis suggests that 27–65% of the variation in economic growth could be explained by total factor productivity growth. These results suggest that public capital accumulation did contribute to regional economic growth in the Netherlands, but that other factors, such as technological change and innovation, may be more important to achieve long-term economic growth.