Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark

Autores
Byrialsen, Mikael Randrup; Valdecantos, Sebastián
Año de publicación
2024
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
In the 2010s, Denmark registered sustained current account surpluses of an average of 8% of gross domestic product (GDP). In trying to explain the nature and causes of this extraordinary performance, recent studies have pointed to a temporary change in the private sector’s financial behavior as the main driver. However, descriptive analysis of the balance of payments shows that the improvement of the current account in the 2010s has been driven by three main elements: (i) the increase in real net exports, (ii) the increase in terms of trade, and (iii) the improvement in the income account. This article explores how the current account balance and the net lending of the Danish private sector would have evolved under alternative scenarios for these three elements. This is done through an empirical quarterly structural macroeconomic model for the period 2005–20, which we use to make counterfactual analyses. We find that, although part of the increase in the current account is due to an increase in domestic savings, as recent studies suggest, the effect of factors specifically related to the external sector has also been significant. Hence, the findings of this article suggest that the high current account surplus of Denmark is more a structural phenomenon than a temporary one, as official reports have been claiming thus far.
Fil: Byrialsen, Mikael Randrup. Aalborg University Business School. MaMTEP; Denmark.
Fil: Valdecantos, Sebastián. Aalborg University. MaMTEP. Aalborg University Business School; Denmark.
Fuente
International Journal of Political Economy, 53(4), 364-408. ISSN 1558-0970. 10.1080/08911916.2024.2412977
Materia
Cuentas Corrientes
Modelo de Flujos y Stocks Consistentes
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by/4.0/deed.es
Repositorio
Nülan (UNMDP-FCEyS)
Institución
Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales
OAI Identificador
oai:nulan.mdp.edu.ar:4310

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network_name_str Nülan (UNMDP-FCEyS)
spelling Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in DenmarkByrialsen, Mikael RandrupValdecantos, SebastiánCuentas CorrientesModelo de Flujos y Stocks ConsistentesIn the 2010s, Denmark registered sustained current account surpluses of an average of 8% of gross domestic product (GDP). In trying to explain the nature and causes of this extraordinary performance, recent studies have pointed to a temporary change in the private sector’s financial behavior as the main driver. However, descriptive analysis of the balance of payments shows that the improvement of the current account in the 2010s has been driven by three main elements: (i) the increase in real net exports, (ii) the increase in terms of trade, and (iii) the improvement in the income account. This article explores how the current account balance and the net lending of the Danish private sector would have evolved under alternative scenarios for these three elements. This is done through an empirical quarterly structural macroeconomic model for the period 2005–20, which we use to make counterfactual analyses. We find that, although part of the increase in the current account is due to an increase in domestic savings, as recent studies suggest, the effect of factors specifically related to the external sector has also been significant. Hence, the findings of this article suggest that the high current account surplus of Denmark is more a structural phenomenon than a temporary one, as official reports have been claiming thus far.Fil: Byrialsen, Mikael Randrup. Aalborg University Business School. MaMTEP; Denmark.Fil: Valdecantos, Sebastián. Aalborg University. MaMTEP. Aalborg University Business School; Denmark.Taylor and Francis2024-12-02info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfhttps://nulan.mdp.edu.ar/id/eprint/4310/https://nulan.mdp.edu.ar/id/eprint/4310/1/byrialsen-valdecantos-2024.pdf International Journal of Political Economy, 53(4), 364-408. ISSN 1558-0970. 10.1080/08911916.2024.2412977 <https://doi.org/10.1080/08911916.2024.2412977> reponame:Nülan (UNMDP-FCEyS)instname:Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Socialesenginfo:eu-repo/semantics/altIdentifier/doi/10.1080/08911916.2024.2412977Dinamarcainfo:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by/4.0/deed.es2025-09-29T13:41:49Zoai:nulan.mdp.edu.ar:4310instacron:UNMDP-FCEySInstitucionalhttp://nulan.mdp.edu.ar/Universidad públicaNo correspondehttp://nulan.mdp.edu.ar/cgi/oai2cendocu@mdp.edu.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:18452025-09-29 13:41:49.34Nülan (UNMDP-FCEyS) - Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Socialesfalse
dc.title.none.fl_str_mv Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
title Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
spellingShingle Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
Byrialsen, Mikael Randrup
Cuentas Corrientes
Modelo de Flujos y Stocks Consistentes
title_short Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
title_full Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
title_fullStr Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
title_full_unstemmed Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
title_sort Saving to build wealth? An empirical analysis of the high (and increasing) current account surplus in Denmark
dc.creator.none.fl_str_mv Byrialsen, Mikael Randrup
Valdecantos, Sebastián
author Byrialsen, Mikael Randrup
author_facet Byrialsen, Mikael Randrup
Valdecantos, Sebastián
author_role author
author2 Valdecantos, Sebastián
author2_role author
dc.subject.none.fl_str_mv Cuentas Corrientes
Modelo de Flujos y Stocks Consistentes
topic Cuentas Corrientes
Modelo de Flujos y Stocks Consistentes
dc.description.none.fl_txt_mv In the 2010s, Denmark registered sustained current account surpluses of an average of 8% of gross domestic product (GDP). In trying to explain the nature and causes of this extraordinary performance, recent studies have pointed to a temporary change in the private sector’s financial behavior as the main driver. However, descriptive analysis of the balance of payments shows that the improvement of the current account in the 2010s has been driven by three main elements: (i) the increase in real net exports, (ii) the increase in terms of trade, and (iii) the improvement in the income account. This article explores how the current account balance and the net lending of the Danish private sector would have evolved under alternative scenarios for these three elements. This is done through an empirical quarterly structural macroeconomic model for the period 2005–20, which we use to make counterfactual analyses. We find that, although part of the increase in the current account is due to an increase in domestic savings, as recent studies suggest, the effect of factors specifically related to the external sector has also been significant. Hence, the findings of this article suggest that the high current account surplus of Denmark is more a structural phenomenon than a temporary one, as official reports have been claiming thus far.
Fil: Byrialsen, Mikael Randrup. Aalborg University Business School. MaMTEP; Denmark.
Fil: Valdecantos, Sebastián. Aalborg University. MaMTEP. Aalborg University Business School; Denmark.
description In the 2010s, Denmark registered sustained current account surpluses of an average of 8% of gross domestic product (GDP). In trying to explain the nature and causes of this extraordinary performance, recent studies have pointed to a temporary change in the private sector’s financial behavior as the main driver. However, descriptive analysis of the balance of payments shows that the improvement of the current account in the 2010s has been driven by three main elements: (i) the increase in real net exports, (ii) the increase in terms of trade, and (iii) the improvement in the income account. This article explores how the current account balance and the net lending of the Danish private sector would have evolved under alternative scenarios for these three elements. This is done through an empirical quarterly structural macroeconomic model for the period 2005–20, which we use to make counterfactual analyses. We find that, although part of the increase in the current account is due to an increase in domestic savings, as recent studies suggest, the effect of factors specifically related to the external sector has also been significant. Hence, the findings of this article suggest that the high current account surplus of Denmark is more a structural phenomenon than a temporary one, as official reports have been claiming thus far.
publishDate 2024
dc.date.none.fl_str_mv 2024-12-02
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv https://nulan.mdp.edu.ar/id/eprint/4310/
https://nulan.mdp.edu.ar/id/eprint/4310/1/byrialsen-valdecantos-2024.pdf
url https://nulan.mdp.edu.ar/id/eprint/4310/
https://nulan.mdp.edu.ar/id/eprint/4310/1/byrialsen-valdecantos-2024.pdf
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/doi/10.1080/08911916.2024.2412977
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by/4.0/deed.es
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by/4.0/deed.es
dc.format.none.fl_str_mv application/pdf
dc.coverage.none.fl_str_mv Dinamarca
dc.publisher.none.fl_str_mv Taylor and Francis
publisher.none.fl_str_mv Taylor and Francis
dc.source.none.fl_str_mv International Journal of Political Economy, 53(4), 364-408. ISSN 1558-0970. 10.1080/08911916.2024.2412977 <https://doi.org/10.1080/08911916.2024.2412977>
reponame:Nülan (UNMDP-FCEyS)
instname:Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales
reponame_str Nülan (UNMDP-FCEyS)
collection Nülan (UNMDP-FCEyS)
instname_str Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales
repository.name.fl_str_mv Nülan (UNMDP-FCEyS) - Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales
repository.mail.fl_str_mv cendocu@mdp.edu.ar
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