Recently, Casper de Vries, Professor Emeritus of Monetary Economics at Erasmus School of Economics, was part of the Economists' Panel at BNR Nieuwsradio. Together with Roelof Salomons, head of investment strategy at BlackRock Netherlands and Professor of investment theory and asset management at Groningen University, he gives his expertise on the four future scenarios outlined by the Central Planning Bureau to help policymakers make choices.
The Central Planning Bureau report shows that the Netherlands faces difficult choices. If the Netherlands desire more market forces, it will create more inequality in the long run. If the Netherlands want to focus less on globalisation, it will be at the expense of economic growth in the long run. To get a better overall picture of the consequences of these kinds of choices, the Central Planning Bureau drew four highly different scenarios. In the ‘Market’ scenario, for instance, there is over 70% economic growth until 2040, where in the other three scenarios it is somewhere between 10% and 40%.
To outline the four future scenarios, the Central Planning Bureau had to make some assumptions. For instance, the countries surrounding us would have to make the same choices as the Netherlands, and government spending would have to remain stable. Yet, this is not a problem, De Vries argues. 'Otherwise, it becomes a hodgepodge of all kinds of different directions within all kinds of different countries, and that is not doable. You will have to make some assumptions at some point.' What can be said with some certainty is that ageing will be the biggest external factor. ‘This will put the most pressure on policy making,’ the professor emeritus argues.
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You can listen to the full episode from BNR Nieuwsradio, 14 October 2024, here.