Beige and Brown Modern Textured Sustainable Business Presentation (1).pdf

netherlands economy

1. -By Group Seven
THE NETHERLANDS
MACROECONOMIC PRESENTATION

2. Positive Correlation: The data from 1990 to 2023 shows a
positive correlation between nominal interest rates and
inflation, supporting the Fisher Effect.
Periods of Divergence: Instances of negative real interest
rates, particularly in 2001 and 2022, suggest that the Fisher
Effect may not hold perfectly during economic instability or
high inflation.
Long-Term Validity: The Fisher Effect is generally applicable
in the long term, with nominal rates adjusting to inflation
trends, though short-term deviations can occur.
The positive correlation between nominal interest rates and
inflation in the Netherlands supports the Fisher Effect, influencing
expectations around the EUR/USD exchange rate. Rising interest
rates in response to inflation may strengthen the euro against the
dollar, as higher rates attract investment. However, negative real
rates and economic fluctuations can create volatility, impacting
the currency dynamics between the euro and the dollar.
FISCHER EFFECT AND GDP
Through the below graph we would be
particularly looking at the period during the
2008 economic crisis and the period after the
pandemic which is during 2021-23 to observe
the effect on the interest rates and the overall
GDP of the economy

3. Exchange rates (EUR/USD)
Interest Rate
Inflation
Balance of Trade

4. Year Exports imports NET EXPORTS
1996 1997 1998 19992000
2001
2002 20032004 2005 2006 20072008 2009
2010
2011
2012 2013 2014 2015 2016 2017 2018 2019 2020
2021
2022 2023
0
200000
400000
600000
800000
VALUE (IN MILLIONS)
YEARS
From 1995 to 2023, the
Netherlands experienced
significant fluctuations in its
exchange rate influenced by
global economic conditions
and European Union (EU)
policies. The introduction of
the euro in 1999 replaced the
Dutch guilder, aligning the
Netherlands with other
Eurozone countries and
stabilizing exchange rate
volatility within the bloc. Major
global events, such as the 2008
financial crisis and COVID-19,
impacted the euro's value,
affecting Dutch trade, while
socio-political factors like
Brexit and the Ukraine-Russia
conflict also created pressures
on the euro exchange rat

5. Contribution by each Group Member
Chahak Jhunjhunwala- Interest Rate and it's relationship with
inflation
SAP ID- 76012400299
Niharika Gour- Fischer effect and GDP
SAP ID - 76012300162
Garv Sharma- Impact on Exchange rate wtr to USD
SAP ID- 7601240060
Kriday Agarwal- Impact on Exchange rate wtr to key macroeconomic
variables
.
Shreya Agarwal- Data of Exports and J Curve
SAP ID- 760124002
Yashasvi - Data of Imports and J-Curve
SAP ID- 76012400288
SAP ID-76012400493