The Dutch economy is so volatile that it harms our happiness. In comparison to Belgium, Germany and other related economies, the Netherlands often has higher peaks and deeper lows, according to recent research from De Nederlandsche Bank (DNB). A recession even makes people twice as unhappy than a period of growth brings them happiness.
Three characteristics make the Netherlands economically more unstable than neighbouring countries: its pension system, the housing market and its fiscal policy. According to De Nederlandsche Bank, the Dutch government has reinforced the erratic nature of the economy in recent years by cutting back more often and more severely than in other countries in times of decline, and by increasing government spending in times of strong economic growth. As a result of this pro-cyclical fiscal policy, both crises and booms are more extreme.
During a crisis it is more difficult for the Dutch population to boost the economy by increasing their consumption. After all, most of their money is already spent on pension savings and paying off their mortgage. Only 30 percent of the financial assets of the Dutch consist of liquid assets - money that they can spend immediately - as opposed to 75 percent for the Belgians. This makes it more difficult for the Dutch population to absorb a financial shock.
Ruut Veenhoven, Happiness Professor of the Erasmus Happiness Economics Research Organisation (EHERO) of Erasmus School of Economics notes that the happiness of the Dutch population has been showing a stable, slightly upward trend for over forty years. In fact, of the countries surrounding us only the Scandinavians and Swiss are happier. 'Our happiness is determined by so much more than economics alone’, says Veenhoven.
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The full article of Dutch newspaper De Volkskrant, 5 March 2020, can be found here (in Dutch).