127-520: The economy of the Netherlands is a highly developed market economy focused on trade and logistics , manufacturing , services , innovation and technology and sustainable and renewable energy . It is the world's 18th largest economy by nominal GDP and the 28th largest by purchasing power parity (PPP) and is the fifth largest economy in European Union by nominal GDP. It has
254-490: A medium of exchange with a credit or debit value accepted within the network, such as a unit of currency. A planned economy is one where political agents directly control what is produced and how it is sold and distributed. A green economy is low-carbon and resource efficient. In a green economy, growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency , and prevent
381-514: A metric such as silver, bronze, copper, etc. A barley/shekel was originally both a unit of currency and a unit of weight, just as the British Pound was originally a unit denominating a one-pound mass of silver. Most exchange of goods had occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece , where the present English word 'economy' originated, many people were bond slaves of
508-471: A borrowing of more than 116% of the value of the home were reduced to 106% and are still continuously being reduced every year. The deduction is also capped to 50.5% and reducing every year. Together with the after-effects of the Great Recession the result was a housing crisis, with a decrease of prices almost 25% percent in some areas. Recent years have shown a recovery of 10% to even 20% per year in
635-484: A certain currency . However, monetary transactions only account for a small part of the economic domain. Economic activity is spurred by production which uses natural resources, labor and capital. It has changed over time due to technology , innovation (new products, services, processes, expanding markets, diversification of markets, niche markets, increases revenue functions) and changes in industrial relations (most notably child labor being replaced in some parts of
762-553: A company stock's current earnings. Intellectual capital contributes to a stock's return growth. The efficient-market hypothesis (EMH) is a hypothesis in financial economics that states that asset prices reflect all available information at the current time. The 'hard' efficient-market hypothesis does not explain the cause of events such as the crash in 1987 , when the Dow Jones Industrial Average plummeted 22.6 percent—the largest-ever one-day fall in
889-431: A country as "socialist" or not. At that time, I wasn't sure that any definite criterion existed to make that sort of clear-cut judgment. And so I was pleasantly surprised at the clarity and decisiveness of Mises's answer. "A stock market," he answered promptly. "A stock market is crucial to the existence of capitalism and private property . For it means that there is a functioning market in the exchange of private titles to
1016-779: A country or an area", seems not to have developed until the 1650s. As long as someone has been making, supplying and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Sumer developed a large-scale economy based on commodity money , while the Babylonians and their neighboring city states later developed the earliest system of economics as we think of, in terms of rules/laws on debt , legal contracts and law codes relating to business practices, and private property. The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts. They developed
1143-399: A dealer. Some large companies will have their stock listed on more than one exchange in different countries, so as to attract international investors. Stock exchanges may also cover other types of securities, such as fixed-interest securities (bonds) or (less frequently) derivatives, which are more likely to be traded OTC. Trade in stock markets means the transfer (in exchange for money) of
1270-564: A function of fixed costs associated with investing. Her research concludes that a fixed cost of $ 200 per year is sufficient to explain why nearly half of all U.S. households do not participate in the market. Participation rates have been shown to strongly correlate with education levels, promoting the hypothesis that information and transaction costs of market participation are better absorbed by more educated households. Behavioral economists Harrison Hong, Jeffrey Kubik and Jeremy Stein suggest that sociability and participation rates of communities have
1397-497: A generous mortgage interest deductibility , which benefit the wealthier households. Due to the generous pensions the pension-related savings are the most important part of wealth in the Netherlands, yet are not subject to capital income taxation, which increases the inequality. The taxation comes as income tax when the saved pension is paid out. People having earned minimum wages only, will not build up any pension. The idea behind
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#17328022925041524-513: A global information society as understanding of a new type of "all-connected" society is created. In the late 2000s, the new type of economies and economic expansions of countries like China , Brazil , and India bring attention and interest to economies different from the usually dominating Western-type economies and economic models. A market economy is one where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or
1651-403: A major shipping and manufacturing center. Poverty slowly declined and begging largely disappeared along with steadily improving working conditions for the population. In 1959, the Netherlands discovered large natural gas fields. The export of natural gas led to large windfall profits. However, as an unforeseen consequence, these were believed to have led to a decline in the manufacturing sector in
1778-474: A maximum income-ceiling. Whilst employed persons get their contribution deducted automatically from their wage, the unemployed pay by themselves. The AKW is financed by employers, whereas the AOW is financed by the employees. The AOW, additionally, is financed by a small government subsidy. The Werknemersverzekering is compulsory for all employed people within the Netherlands. It includes the coverage of employees in
1905-510: A mutual fund or an exchange traded fund. Direct investment involves direct ownership of shares. Direct ownership of stock by individuals rose slightly from 17.8% in 1992 to 17.9% in 2007, with the median value of these holdings rising from $ 14,778 to $ 17,000. Indirect participation in the form of retirement accounts rose from 39.3% in 1992 to 52.6% in 2007, with the median value of these accounts more than doubling from $ 22,000 to $ 45,000 in that time. Rydqvist, Spizman, and Strebulaev attribute
2032-454: A pattern in what is, in fact, just noise , e.g. seeing familiar shapes in clouds or ink blots. In the present context, this means that a succession of good news items about a company may lead investors to overreact positively, driving the price up. A period of good returns also boosts the investors' self-confidence, reducing their (psychological) risk threshold. Another phenomenon—also from psychology—that works against an objective assessment
2159-549: A pension is to have a net income after retirement that is comparable to before retirement. The AOW, the Dutch retirement law, guarantees an income up to 70% of minimum wage per person. Therefore, only people earning more than minimum wage need to save to ensure comparable income after retirement. The Netherlands was one of the few countries in the world where the interest paid on mortgages is almost fully deductible from income tax. Since 2013 big changes were made. The conditions allowing
2286-626: A profound effect on the socioeconomic and cultural conditions starting in the United Kingdom , then subsequently spreading throughout Europe , North America , and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. In Europe wild capitalism started to replace the system of mercantilism (today: protectionism ) and led to economic growth . The period
2413-446: A public stock exchange as well as stock that is only traded privately, such as shares of private companies that are sold to investors through equity crowdfunding platforms. Investments are usually made with an investment strategy in mind. The total market capitalization of all publicly traded stocks worldwide rose from US$ 2.5 trillion in 1980 to US$ 111 trillion by the end of 2023. As of 2016 , there are 60 stock exchanges in
2540-416: A rigorous and stable microeconomic policy with wide-ranging structural and regulatory reforms. The government has gradually reduced its role in the economy since the 1980s. Privatization and deregulation is still continuing. With regards to social and economic policy, the government cooperates with its so called social partners ( trade unions and employers' organizations ). The three parties come together in
2667-513: A state. The first economist in the true modern meaning of the word was the Scotsman Adam Smith (1723–1790) who was inspired partly by the ideas of physiocracy , a reaction to mercantilism and also later Economics student, Adam Mari. He defined the elements of a national economy: products are offered at a natural price generated by the use of competition - supply and demand - and the division of labor . He maintained that
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#17328022925042794-498: A statistically significant impact on an individual's decision to participate in the market. Their research indicates that social individuals living in states with higher than average participation rates are 5% more likely to participate than individuals that do not share those characteristics. This phenomenon also explained in cost terms. Knowledge of market functioning diffuses through communities and consequently lowers transaction costs associated with investing. In 12th-century France,
2921-411: A stock exchange trader . Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry . This method is used in some stock exchanges and commodities exchanges , and involves traders shouting bid and offer prices. The other type of stock exchange has a network of computers where trades are made electronically. An example of such an exchange
3048-467: A stock or security from a seller to a buyer. This requires these two parties to agree on a price. Equities (stocks or shares) confer an ownership interest in a particular company. Participants in the stock market range from small individual stock investors to larger investors, who can be based anywhere in the world, and may include banks , insurance companies, pension funds and hedge funds . Their buy or sell orders may be executed on their behalf by
3175-493: A study of the fifty largest one-day share price movements in the United States in the post-war period seems to confirm this. A 'soft' EMH has emerged which does not require that prices remain at or near equilibrium, but only that market participants cannot systematically profit from any momentary ' market anomaly '. Moreover, while EMH predicts that all price movement (in the absence of change in fundamental information)
3302-547: A week, heads of stockholders and voluntary workers that earn up to €150 per year. To profit from the benefit the unemployed has to submit an application to the Employee Insurance Agency ( Uitvoeringsinstituut Werknemersverzekeringen (UWV)) within one week of becoming unemployed and additionally has to register as job-seeker. The WW only covers employees with a sufficient work history, meaning that an applicant has to have been working for at least 26 weeks in
3429-402: Is group thinking . As social animals, it is not easy to stick to an opinion that differs markedly from that of a majority of the group. An example with which one may be familiar is the reluctance to enter a restaurant that is empty; people generally prefer to have their opinion validated by those of others in the group. In one paper the authors draw an analogy with gambling . In normal times
3556-461: Is Borssele , which became operational in 1973 and as of 2011 produces about 4% of the country's electricity. The older Dodewaard nuclear power plant was a test reactor that later got attached to the national grid but was closed in 1997. A 2MW research reactor known as Reactor Institute Delft (RID) is located in Delft, as part of the physics department of Delft University of Technology . This reactor
3683-540: Is a major trade, logistics and economic center of the world and is Europe's largest seaport . Netherlands is ranked fifth on global innovation index and fourth on the Global Competitiveness Report . Among OECD nations, Netherlands has a highly efficient and strong social security system; social expenditure stood at roughly 25.3% of GDP . The Netherlands has a prosperous and open economy , which depends heavily on foreign trade . The economy
3810-460: Is also applied in philosophy to designate the fading of postmodernism in the late 90s and especially in the beginning of the 21st century. With the spread of Internet as a mass media and communication medium especially after 2000–2001, the idea for the Internet and information economy is given place because of the growing importance of e-commerce and electronic businesses, also the term for
3937-429: Is an exchange (or bourse) where stockbrokers and traders can buy and sell shares (equity stock ), bonds , and other securities . Many large companies have their stocks listed on a stock exchange. This makes the stock more liquid and thus more attractive to many investors. The exchange may also act as a guarantor of settlement. These and other stocks may also be traded " over the counter " (OTC), that is, through
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4064-579: Is bank-based or market-based. Events such as the 2007–2008 financial crisis have prompted a heightened degree of scrutiny of the impact of the structure of stock markets (called market microstructure ), in particular to the stability of the financial system and the transmission of systemic risk . A transformation is the move to electronic trading to replace human trading of listed securities . Changes in stock prices are mostly caused by external factors such as socioeconomic conditions, inflation, exchange rates. Intellectual capital does not affect
4191-466: Is called Keynesianism in his honor. In the late 1950s, the economic growth in America and Europe—often called Wirtschaftswunder (German for economic miracle ) —brought up a new form of economy: mass consumption economy . In 1958, John Kenneth Galbraith (1908–2006) was the first to speak of an affluent society in his book The Affluent Society . In most of the countries the economic system
4318-704: Is called a social market economy . With the fall of the Iron Curtain and the transition of the countries of the Eastern Bloc towards democratic government and market economies, the idea of the post-industrial society is brought into importance as its role is to mark together the significance that the service sector receives instead of industrialization. Some attribute the first use of this term to Daniel Bell's 1973 book, The Coming of Post-Industrial Society , while others attribute it to social philosopher Ivan Illich's book, Tools for Conviviality . The term
4445-568: Is called the Industrial Revolution because the system of production and division of labor enabled the mass production of goods . The contemporary concept of "the economy" wasn't popularly known until the American Great Depression in the 1930s. After the chaos of two World Wars and the devastating Great Depression, policymakers searched for new ways of controlling the course of the economy. This
4572-722: Is exchanged. Due to the growing importance of the financial sector in modern times, the term real economy is used by analysts as well as politicians to denote the part of the economy that is concerned with the actual production of goods and services, as ostensibly contrasted with the paper economy , or the financial side of the economy, which is concerned with buying and selling on the financial markets. Alternate and long-standing terminology distinguishes measures of an economy expressed in real values (adjusted for inflation ), such as real GDP , or in nominal values (unadjusted for inflation). The study of economics are roughly divided into macroeconomics and microeconomics . Today,
4699-490: Is half of the EU average (59%). Dutch firms face significant long-term hurdles to investment, including a lack of trained people (71%), and high energy prices (66%). Barriers are diminishing, with numbers lower than the EU average and than 2021. For example, the availability of funding is less of an impediment than across the EU (23% versus 44%). In 2023, one in ten Dutch enterprises (13%) brought new goods, processes, or services to
4826-458: Is home to several large multinationals. Well-known multinationals are Heineken , Ahold , Philips , TomTom , Randstad and ING , all of which have their headquarters in Amsterdam . Thousands of companies of non-Dutch origin have their headquarters in the Netherlands, like EADS , LyondellBasell and IKEA , because of attractive corporate tax levels. The Netherlands' biggest companies in
4953-674: Is known as the Dutch Golden Age . This economic boom abruptly came to an end by a combination of political-military upheavals and adverse economic developments around 1670. Still the Netherlands kept a high level of prosperity, due to trade and agriculture. Towards the 1800s, the Netherlands did not industrialize as rapidly as some other countries in Europe. One explanation for this is that the Netherlands were struggling to come to terms with having lost their dominant economical (based mainly on trade and agriculture) and political position in
5080-489: Is not meant for energy provision but used as a neutron and positron source for research. In 1994, the States General of the Netherlands voted to phase out nuclear power after a discussion of nuclear waste management. In 1997, the power station at Dodewaard was shut down and the government decided it was planning to end Borssele 's operating license in 2003. This has since been postponed to 2034, if it complied with
5207-476: Is noted for stable industrial relations, fairly low unemployment and inflation , a sizable current account surplus (which, compared to the size of the country, is even more than Germany) and an important role as a European transportation hub; Rotterdam is the biggest port in Europe; and Amsterdam has one of the biggest airports in the world. Industrial activity is predominantly in food processing , chemicals, petroleum refining, high-tech , financial services,
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5334-464: Is random (i.e. non-trending) , many studies have shown a marked tendency for the stock market to trend over time periods of weeks or longer. Various explanations for such large and apparently non-random price movements have been promulgated. For instance, some research has shown that changes in estimated risk, and the use of certain strategies, such as stop-loss limits and value at risk limits, theoretically could cause financial markets to overreact. But
5461-414: Is relatively low in the Netherlands. However, the inequality when measured in distributions of household wealth is high, where the top 1% owns 24% of all net wealth, and the top 10% own 60%. Moreover, rather large wealth disparities persist in the Netherlands in relation to age, where those under 35 years-of-age own 10% as much as older workers. This is a consequence from the low taxation of home ownership and
5588-488: Is similar to the New York Stock Exchange. One or more NASDAQ market makers will always provide a bid and ask the price at which they will always purchase or sell 'their' stock. The Paris Bourse , now part of Euronext , is an order-driven, electronic stock exchange. It was automated in the late 1980s. Prior to the 1980s, it consisted of an open outcry exchange. Stockbrokers met on the trading floor of
5715-411: Is studied at the regional and national levels, and common analyses include income and production, money, prices, employment, international trade, and other issues. Stock market A stock market , equity market , or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on
5842-519: Is the NASDAQ . A potential buyer bids a specific price for a stock, and a potential seller asks a specific price for the same stock. Buying or selling at the Market means you will accept any ask price or bid price for the stock. When the bid and ask prices match, a sale takes place, on a first-come, first-served basis if there are multiple bidders at a given price. The purpose of a stock exchange
5969-405: Is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace . The exchanges provide real-time trading information on the listed securities, facilitating price discovery . The New York Stock Exchange (NYSE) is a physical exchange, with a hybrid market for placing orders electronically from any location as well as on the trading floor . Orders executed on
6096-469: The AOW act of 1956, a state pension, from the age of 65. The act was amended in 2012 that makes the age in several stages up to 67 years in 2024 . Married couples or those who live together receive 50% of minimum wage per person and a single person receives 70% of minimum wage. Most (about 70%) earn an extra pension from private pension funds. Employees are obliged to take part in the sector pension funds. In total
6223-614: The Dutch East India Company . The Netherlands is a founding member of the European Union , the OECD and the World Trade Organization . After declaring its independence from the empire of Philip II of Spain in 1581, the Netherlands experienced almost a century of explosive economic growth. A technological revolution in capital, due to Protestant traders of Flanders who fled to the Netherlands, helped
6350-712: The Fortune Global 500 as of 2022 are as following: Economy An economy is an area of the production , distribution and trade , as well as consumption of goods and services . In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources. A given economy is a set of processes that involves its culture , values , education, technological evolution, history, social organization , political structure , legal systems , and natural resources as main factors. These factors give context, content, and set
6477-460: The House of Representatives has agreed to loosen these regulations. Due to the costs of employees and costs of firing them, a big part of the working force (about 15% of the working force) is an independent one person company (ZZP). They are independent and get paid by delivery without higher social costs. Another big part of the workforce is hired as temporary workforce. State unemployment benefits in
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#17328022925046604-497: The Netherlands . Even in the days before perestroika , socialism was never a monolith. Within the Communist countries , the spectrum of socialism ranged from the quasi-market , quasi- syndicalist system of Yugoslavia to the centralized totalitarianism of neighboring Albania . One time I asked Professor von Mises , the great expert on the economics of socialism, at what point on this spectrum of statism would he designate
6731-556: The North Sea are of little importance, the Netherlands have an estimated 25% of natural gas reserves in the EU. Natural gas reserves of the Netherlands are estimated (as of 2014) to be about 600 billion cubic feet, or about 0.3% of the world total. In 2014–2015 the government decided to reduce the production of gas in the province Groningen significantly due to problems of sinking ground, differential settlement levels and tremors (small earth quakes) causing damages to properties, end 2018
6858-487: The Social-Economic Council (‘Sociaal Economische Raad’), the main platform for social dialogue . The Dutch social security is very comprehensive, covering Dutch residents in an encompassing manner and is divided into the national security ( Volksverzekering ) and the employee insurance ( Werknemersverzekering ). Whereas the first covers all living in the Netherlands and the social benefits provided,
6985-521: The World Economic Forum 's Global Competitiveness Report . In 2018, in addition to smaller productions of other agricultural products, the Netherlands produced: The discovery of the large Groningen natural gas field in 1959 and the massive windfalls accrued over subsequent decades, were believed to have led to a decline in the manufacturing sector in the Netherlands, leading to the theory of Dutch disease . While its oil reserves in
7112-409: The counterparty could default on the transaction. The smooth functioning of all these activities facilitates economic growth in that lower costs and enterprise risks promote the production of goods and services as well as possibly employment. In this way the financial system is assumed to contribute to increased prosperity, although some controversy exists as to whether the optimal financial system
7239-506: The freeholders . The economic discussion was driven by scarcity . In Chinese economic law, the huge cycle of institutional innovation contains an idea. Serving a non-market economy promotes a firm's tenure that is legally guaranteed and protected from bureaucratic opportunities. In the Middle Ages, what is now known as an economy was not far from the subsistence level. Most exchange occurred within social groups . On top of this,
7366-425: The income distribution have lessened their participation rate both directly and indirectly from 53.2% in 2007 to 48.8% in 2013, while over the same period households in the top decile of the income distribution slightly increased participation 91.7% to 92.1%. The mean value of direct and indirect holdings at the bottom half of the income distribution moved slightly downward from $ 53,800 in 2007 to $ 53,600 in 2013. In
7493-490: The loss of biodiversity and ecosystem services . A gig economy is one in which short-term jobs are assigned or chosen on-demand. The global economy refers to humanity's economic system or systems overall. An informal economy is neither taxed nor monitored by any form of government. The economy may be considered as having developed through the following phases or degrees of precedence: In modern economies, these phase precedences are somewhat differently expressed by
7620-476: The means of production . There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist." The stock market is one of the most important ways for companies to raise money, along with debt markets which are generally more imposing but do not trade publicly. This allows businesses to be publicly traded, and raise additional financial capital for expansion by selling shares of ownership of
7747-524: The three-sector model : Other sectors of the developed community include: The gross domestic product (GDP) of a country is a measure of the size of its economy, or more specifically, monetary measure of the market value of all the final goods and services produced. The most conventional economic analysis of a country relies heavily on economic indicators like the GDP and GDP per capita . While often useful, GDP only includes economic activity for which money
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#17328022925047874-566: The "Brugse Beurse", institutionalizing what had been, until then, an informal meeting. The idea quickly spread around Flanders and neighboring countries and "Beurzen" soon opened in Ghent and Rotterdam . International traders, and specially the Italian bankers, present in Bruges since the early 13th-century, took back the word in their countries to define the place for stock market exchange: first
8001-467: The DMM may use their own resources (money or stock) to close the difference. Once a trade has been made, the details are reported on the "tape" and sent back to the brokerage firm, which then notifies the investor who placed the order. Computers play an important role, especially for program trading . The NASDAQ is an electronic exchange, where all of the trading is done over a computer network . The process
8128-448: The Dutch or global market. Majority of Dutch firms are also more technologically oriented than EU peers - almost eight out of ten Dutch firms (78%) employed at least one digital technology in 2023. The EU average is 70%. The majority of Dutch firms utilise digital platform technologies (59%), robots (56%), and the Internet of Things (55%), whereas just a small percentage use 3D printing (19%) or augmented/VR technology (15%). The Netherlands
8255-409: The EU, Dutch firms prioritise new goods or services (26% vs. 34% for replacement). In keeping with the EU average of 10%, just 7% of enterprises in the Netherlands do not plan to invest. Dutch companies were hurt by the energy crisis in 2022 - 2023, albeit to a lower extent than those elsewhere in the EU. While most companies are concerned about energy prices, just 30% consider it a critical issue. This
8382-454: The English model and the success of England's joint-stock enterprises and trading guilds. Beside trade, an early "industrial revolution" (powered by wind, water and peat ), land reclamation from the sea, and agricultural revolution, helped the Dutch economy achieve the highest standard of living in Europe (and presumably the world) by the middle of the 17th century. Affluence facilitated what
8509-695: The Italians (Borsa), but soon also the French (Bourse), the Germans (börse), Russians (birža), Czechs (burza), Swedes (börs), Danes and Norwegians (børs). In most languages, the word coincides with that for money bag, dating back to the Latin bursa, from which obviously also derives the name of the Van der Beurse family. In the middle of the 13th century , Venetian bankers began to trade in government securities. In 1351
8636-564: The Low Countries followed in the 16th century. Around this time, a joint stock company —one whose stock is owned jointly by the shareholders—emerged and became important for the colonization of what Europeans called the " New World ". There are now stock markets in virtually every developed and most developing economies, with the world's largest markets being in the United States, United Kingdom, Japan, India , China, Canada , Germany ( Frankfurt Stock Exchange ), France, South Korea and
8763-452: The Netherlands into a modern middle-class industrial society. The number of people employed in agriculture decreased while the country made an effort to revive its stake in the highly competitive industrial and trade business. The Netherlands lagged behind Belgium until the late 19th century in industrialization, then caught up by about 1920. Major industries included textiles and (later) the great Philips industrial conglomerate. Rotterdam became
8890-446: The Netherlands, 78% of enterprises have invested in reducing carbon emissions and mitigating the impact of weather disasters as of 2023. Six out of ten (60%) plan to invest in these areas during the next three years. The numbers for 'already invested' and 'intend to invest' above the EU average (56% and 54%, respectively). The largest invested is in trash reduction or recycling (86% of Dutch firms). Dutch companies are more likely to see
9017-509: The Netherlands. While the private sector is the cornerstone of the Dutch economy, governments at different levels have a large part to play. Public spending, excluding social security transfer payments, was at 28% of GDP in 2011. Total tax revenue was 38.7% of GDP in 2010, which was below the EU average. In addition to its own spending, the government plays a significant role through the permit requirements and regulations pertaining to almost every aspect of economic activity. The government combines
9144-567: The Palais Brongniart. In 1986, the CATS trading system was introduced, and the order matching system was fully automated. People trading stock will prefer to trade on the most popular exchange since this gives the largest number of potential counter parties (buyers for a seller, sellers for a buyer) and probably the best price. However, there have always been alternatives such as brokers trying to bring parties together to trade outside
9271-507: The United States. This event demonstrated that share prices can fall dramatically even though no generally agreed upon definite cause has been found: a thorough search failed to detect any 'reasonable' development that might have accounted for the crash. (Such events are predicted to occur strictly by randomness , although very rarely.) It seems also to be true more generally that many price movements (beyond those which are predicted to occur 'randomly') are not occasioned by new information;
9398-585: The Venetian government outlawed spreading rumors intended to lower the price of government funds. Bankers in Pisa , Verona , Genoa and Florence also began trading in government securities during the 14th century. This was only possible because these were independent city-states not ruled by a duke but a council of influential citizens. Italian companies were also the first to issue shares. Companies in England and
9525-403: The amount of pension funds were at the end of 2009 some 664 billion euro and at the end of 2019 1560 billion euro for a bit more than 17 million people. Employees receive on average about 70% of their last salary. During the economic crisis and because of low interest rates, pensions funds have had difficulty keeping up with inflation. With a Gini coefficient of 25.1 (2013) the income inequality
9652-415: The basic motive for free trade is human self-interest. The so-called self-interest hypothesis became the anthropological basis for economics. Thomas Malthus (1766–1834) transferred the idea of supply and demand to the problem of overpopulation . The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture , manufacturing , mining , and transport had
9779-485: The best explanation seems to be that the distribution of stock market prices is non-Gaussian (in which case EMH, in any of its current forms, would not be strictly applicable). Other research has shown that psychological factors may result in exaggerated (statistically anomalous) stock price movements (contrary to EMH which assumes such behaviors 'cancel out'). Psychological research has demonstrated that people are predisposed to 'seeing' patterns, and often will perceive
9906-467: The calculation of the benefits, if a change of work has taken place. To obtain the benefits for a continued time, the unemployed needs to be actively looking for work. Moreover, one needs to participate in e-coaching three and twelve months after the start of unemployment. After one year of unemployment one must register with an employment agency. The Dutch labour market has relatively strict regulations for employers on firing employees, although by June 2014
10033-484: The company in a public market. The liquidity that an exchange affords the investors enables their holders to quickly and easily sell securities. This is an attractive feature of investing in stocks, compared to other less liquid investments such as property and other immoveable assets. History has shown that the price of stocks and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where
10160-418: The conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone. Economic agents can be individuals, businesses , organizations , or governments . Economic transactions occur when two groups or parties agree to the value or price of the transacted good or service, commonly expressed in
10287-408: The control and behavior of the stock market and, in general, on the smooth operation of financial system functions. Financial stability is the raison d'être of central banks. Exchanges also act as the clearinghouse for each transaction, meaning that they collect and deliver the shares, and guarantee payment to the seller of a security. This eliminates the risk to an individual buyer or seller that
10414-466: The country's GDP and 9.6% in total to its employment. With its global ranking of 147th and 83rd place for total contribution to respectively GDP and employment, tourism is a relatively small sector of the Dutch economy. North Holland was by far the most popular province for foreign tourists in 2011. Out of all 11.3 million tourists, 6 million visited North Holland. South Holland took the second place with 1.4 million. Germans, Britons and Belgians made up
10541-445: The courtiers de change were concerned with managing and regulating the debts of agricultural communities on behalf of the banks. Because these men also traded with debts, they could be called the first brokers . The Italian historian Lodovico Guicciardini described how, in late 13th-century Bruges , commodity traders gathered outdoors at a market square containing an inn owned by a family called Van der Beurze , and in 1409 they became
10668-404: The creative sector and electrical machinery. Its highly mechanized agricultural sector employs no more than 2% of the labor force but provides large surpluses for the food-processing industry and for exports. The Netherlands, along with 11 of its EU partners, began circulating the euro currency on 1 January 2002. The Netherlands has had steady natural gas resources since 1959, when a wellspring
10795-406: The differential growth in direct and indirect holdings to differences in the way each are taxed in the United States. Investments in pension funds and 401ks, the two most common vehicles of indirect participation, are taxed only when funds are withdrawn from the accounts. Conversely, the money used to directly purchase stock is subject to taxation as are any dividends or capital gains they generate for
10922-509: The discovery of the vast Groningen gas field . The Netherlands is a "conduit country" that helps to funnel profits from high-tax countries to tax havens. It has been ranked as the 4th largest tax haven in the World. The stern financial was abandoned in 2009, because of the then-current credit crises. The relatively large banking sector was partly nationalized and bailed out through government interventions. The unemployment rate dropped to 5.0% in
11049-481: The duration of two months. After those two months the benefits amount to 70%. Part-time work is taken into account with a calculation of parts of the working hours. If this benefit is less than the minimum income, the unemployed has the possibility of supplementation through the Additional Allowances Act (Toeslagenwet) to sum up the amount. All jobs in the previous twelve months are counted in to
11176-1172: The economy through transferring available funds from units that have excess funds (savings) to those who are suffering from funds deficit (borrowings) (Padhi and Naik, 2012). In other words, capital markets facilitate funds movement between the above-mentioned units. This process leads to the enhancement of available financial resources which in turn affects the economic growth positively. Economic and financial theories argue that stock prices are affected by macroeconomic trends. Macroeconomic trends include such as changes in GDP, unemployment rates, national income, price indices, output, consumption, unemployment, inflation, saving, investment, energy, international trade, immigration, productivity, aging populations, innovations, international finance. increasing corporate profit, increasing profit margins, higher concentration of business, lower company income, less vigorous activity, less progress, lower investment rates, lower productivity growth, less employee share of corporate revenues, decreasing Worker to Beneficiary ratio (year 1960 5:1, year 2009 3:1, year 2030 2.2:1), increasing female to male ratio college graduates. Sometimes,
11303-850: The exchange. Some third markets that were popular are Instinet , and later Island and Archipelago (the latter two have since been acquired by Nasdaq and NYSE, respectively). One advantage is that this avoids the commissions of the exchange. However, it also has problems such as adverse selection . Financial regulators have probed dark pools . Market participants include individual retail investors, institutional investors (e.g., pension funds , insurance companies , mutual funds , index funds , exchange-traded funds , hedge funds , investor groups, banks and various other financial institutions ), and also publicly traded corporations trading in their own shares. Robo-advisors , which automate investment for individuals are also major participants. Indirect investment involves owning shares indirectly, such as via
11430-636: The first stock exchange was founded in Antwerp . Economy at the time meant primarily trade . The European captures became branches of the European states, the so-called colonies . The rising nation-states Spain , Portugal , France , Great Britain and the Netherlands tried to control the trade through custom duties and mercantilism (from mercator , lat.: merchant ) was a first approach to intermediate between private wealth and public interest . The secularization in Europe allowed states to use
11557-477: The first known codified legal and administrative systems, complete with courts, jails, and government records. The ancient economy was based primarily on subsistence farming . The Shekel are the first to refer to a unit of weight and currency, used by the Semitic peoples . The first usage of the term came from Mesopotamia circa 3000 BC. and referred to a specific mass of barley which related other values in
11684-520: The following areas: The financing for the Werknemersverzekering is automatically deducted from the employee's income by the employer. The unemployment benefits in the Netherlands, as set out under the WW, covers almost all employees, that are employees based on a working-contract. Excluded from the WW are the following: self-employed, nationally employed, persons working less than four days
11811-702: The form of a 70% benefit of the employee's last-earned salary for up to three years (with a maximum of roughly 2500 euros per month) are available for fired employees, provided that they have worked for a certain minimum time period, usually 26 weeks. Moreover, the self-employed individuals (zelfstandigen zonder personeel (ZZP)) are not automatically covered under the Werknemersverzekeringen , and are not obligated to enroll into unemployment, sickness or disabilities insurance. Self-employed individuals, hence, are required to enroll themselves with private insurance companies. Every Dutch citizen gets according to
11938-470: The form of retirement accounts of 89.6%. The median value of directly owned stock in the bottom quintile of income is $ 4,000 and is $ 78,600 in the top decile of income as of 2007. The median value of indirectly held stock in the form of retirement accounts for the same two groups in the same year is $ 6,300 and $ 214,800 respectively. Since the Great Recession of 2008 households in the bottom half of
12065-611: The government decided to completely abandon the gas production in the province of Groningen by reducing the production slightly each year, the production was expected to come to a halt entirely by 2028. On June 23, 2023, the government decided to close the remaining five production facilities as of October 1, 2023. The possibility of reopening one or more facilities is being kept open, citing the uncertain international situation and possibly very cold weather as possible reasons for this. All wells will be permanently closed and dismantled as of October 1, 2024. To reduce its greenhouse emissions ,
12192-442: The government of the Netherlands is subsidizing a transition away from natural gas for all homes in the country by 2050. In the Netherlands, 98% of enterprises are reducing greenhouse gas emissions, beating the EU average of 89%. However, only 48% of Dutch firms set and monitor their own emission targets. Dutch enterprises mostly cut emissions through waste reduction or recycling (86%), as well as energy efficiency programmes (76%). In
12319-470: The great conquerors raised what we now call venture capital (from ventura , ital.; risk ) to finance their captures. The capital should be refunded by the goods they would bring up in the New World . The discoveries of Marco Polo (1254–1324), Christopher Columbus (1451–1506) and Vasco da Gama (1469–1524) led to a first global economy. The first enterprises were trading establishments. In 1513,
12446-504: The highest safety standards. After the 2010 election , the new government was open to expanding nuclear power. Both of the companies that share ownership of Borssele are proposing to build new reactors. In January 2012, Delta announced it postpones any decision to start building a second nuclear power plant. In 2011, the Netherlands was visited by 11.3 million foreign tourists. In 2012, the Dutch tourism industry contributed 5.4% in total to
12573-436: The holder. In this way, the current tax code incentivizes individuals to invest indirectly. Rates of participation and the value of holdings differ significantly across strata of income. In the bottom quintile of income, 5.5% of households directly own stock and 10.7% hold stocks indirectly in the form of retirement accounts. The top decile of income has a direct participation rate of 47.5% and an indirect participation rate in
12700-400: The immense property of the church for the development of towns. The influence of the nobles decreased. The first Secretaries of State for economy started their work. Bankers like Amschel Mayer Rothschild (1773–1855) started to finance national projects such as wars and infrastructure . Economy from then on meant national economy as a topic for the economic activities of the citizens of
12827-562: The latter provides employment-related benefits. All living in the Netherlands are required to pay into the social security system, including residents from outside the Netherlands, with a few exceptions. The Volksverzekering is compulsory for all and covers the residents under different forms of national insurance: It is overseen by the Social Insurance Bank ( Sociale Verzekeringsbank (SVB)) and financed through earning-related contributions of employers and employees up until
12954-422: The leading European nations for attracting foreign direct investment and is one of the five largest investors in the United States. The economy experienced a slowdown in 2005, but in 2006 recovered to the fastest pace in six years on the back of increased exports and strong investment. The pace of job growth reached 10-year highs in 2007. The Netherlands is the fifth-most competitive economy in the world, according to
13081-499: The loss of billions of dollars and wealth destruction on a massive scale. An increasing number of people are involved in the stock market, especially since the social security and retirement plans are being increasingly privatized and linked to stocks and bonds and other elements of the market. There have been a number of famous stock market crashes like the Wall Street Crash of 1929 , the stock market crash of 1973–4 ,
13208-748: The majority of foreign tourists, respectively 3, 1.5 and 1.4 million. As of 2020, there are nine World Heritage Sites in the Netherlands . The Netherlands are well known for their art and rich historical heritage. The following table shows the main economic indicators in 1980–2021 (with IMF staff estimates in 2022–2027). Inflation under 5% is in green. (in Bil. US$ PPP) (in US$ PPP) (in Bil. US$ nominal) (in US$ nominal) (real) (in Percent) (in Percent) (in % of GDP) In 2022,
13335-462: The market behaves like a game of roulette ; the probabilities are known and largely independent of the investment decisions of the different players. In times of market stress, however, the game becomes more like poker (herding behavior takes over). The players now must give heavy weight to the psychology of other investors and how they are likely to react psychologically. Stock markets play an essential role in growing industries that ultimately affect
13462-476: The market seems to react irrationally to economic or financial news, even if that news is likely to have no real effect on the fundamental value of securities itself. However, this market behaviour may be more apparent than real, since often such news was anticipated, and a counter reaction may occur if the news is better (or worse) than expected. Therefore, the stock market may be swayed in either direction by press releases, rumors, euphoria and mass panic . Over
13589-687: The most popular cities. The Service sector accounts for more than half of the national income, primarily in transportation, distribution and logistics , financial areas, software development and the creative industry. The breadth of service providers in financial services has contributed to the Netherlands achieving a DAW Index score of 5 in 2012. Industrial activity is dominated by the machinery, electronics/high tech industry, metalworking, oil refining, chemical, and food-processing industries. Construction amounts to about 6% of GDP. Agriculture and fishing, although visible and traditional Dutch activities, account for just 2%. The Netherlands continues to be one of
13716-465: The national averages with 25.6% participating directly and 53.4% participating indirectly through a retirement account. 14.7% of households headed by men participated in the market directly and 33.4% owned stock through a retirement account. 12.6% of female-headed households directly owned stock and 28.7% owned stock indirectly. In a 2003 paper by Vissing-Jørgensen attempts to explain disproportionate rates of participation along wealth and income groups as
13843-469: The national rate of direct participation was 19.6%, for white households the participation rate was 24.5%, for black households it was 6.4% and for Hispanic households it was 4.3%. Indirect participation in the form of 401k ownership shows a similar pattern with a national participation rate of 42.1%, a rate of 46.4% for white households, 31.7% for black households, and 25.8% for Hispanic households. Households headed by married couples participated at rates above
13970-429: The past 36 weeks before becoming unemployed. If so, the working-weeks requirement is met. Moreover, the employee is only eligible to unemployment benefits if the unemployment has not been due to his own fault (e.g. own termination of the job contract). The benefits received through the WW are earnings-related and amount to a sum of 75% percent of the previous earnings per day (which is based on 5 working days per week) for
14097-431: The range of fields of study examining the economy revolves around the social science of economics, but may also include sociology , history , anthropology , and geography . Practical fields directly related to the human activities involving production , distribution , exchange , and consumption of goods and services as a whole are business , engineering , government , and health care . Macroeconomics
14224-410: The sector with the highest number of companies registered in Netherlands is Services with 761,749 companies followed by Finance, Insurance, and Real Estate and Retail Trade with 693,255 and 101,025 companies respectively. In the Netherlands, 91% of enterprises say they have invested appropriately during the past three years (2023 - 2020). This beats the EU average at 82%. Compared to other enterprises in
14351-556: The short-term, stocks and other securities can be battered or bought by any number of fast market-changing events, making the stock market behavior difficult to predict. Emotions can drive prices up and down, people are generally not as rational as they think, and the reasons for buying and selling are generally accepted. Behaviorists argue that investors often behave irrationally when making investment decisions thereby incorrectly pricing securities, which causes market inefficiencies, which, in turn, are opportunities to make money. However,
14478-420: The stock market is on the rise is considered to be an up-and-coming economy. The stock market is often considered the primary indicator of a country's economic strength and development. Rising share prices, for instance, tend to be associated with increased business investment and vice versa. Share prices also affect the wealth of households and their consumption. Therefore, central banks tend to keep an eye on
14605-555: The summer of 2011, but increased with a sharp rate to 7.3% in May 2013, and 6.8% in 2015. It dropped again to 3.9% in March 2018. The state budget deficit was about 2.2% in 2015, well below the norm of 3.0% in the EU. In 2016, the state budget showed a surplus of 0.4%. It was expected to grow to a surplus of over 1.0% in 2017. Historically, the Dutch introduced and invented the stock market , which initially focused on merchandise trading through
14732-422: The top decile, mean value of all holdings fell from $ 982,000 to $ 969,300 in the same time. The mean value of all stock holdings across the entire income distribution is valued at $ 269,900 as of 2013. The racial composition of stock market ownership shows households headed by whites are nearly four and six times as likely to directly own stocks than households headed by blacks and Hispanics respectively. As of 2011
14859-498: The trading floor enter by way of exchange members and flow down to a floor broker , who submits the order electronically to the floor trading post for the Designated market maker ("DMM") for that stock to trade the order. The DMM's job is to maintain a two-sided market, making orders to buy and sell the security when there are no other buyers or sellers. If a bid–ask spread exists, no trade immediately takes place – in this case,
14986-413: The transition to stronger climate laws as an opportunity (39% vs 23% from other European firms). Researchers in the Netherlands began studying nuclear energy in the 1930s and began construction of research reactor Dodewaard in 1955. Researchers’ goal was to introduce nuclear power technology by 1962 and replace fossil fuels . In 1968, a test nuclear reactor was attached to the power grid . This unit
15113-527: The whole notion of EMH is that these non-rational reactions to information cancel out, leaving the prices of stocks rationally determined. A stock market crash is often defined as a sharp dip in share prices of stocks listed on the stock exchanges. In parallel with various economic factors, a reason for stock market crashes is also due to panic and investing public's loss of confidence. Often, stock market crashes end speculative economic bubbles . There have been famous stock market crashes that have ended in
15240-651: The world with universal access to education ). The word economy in English is derived from the Middle French 's yconomie , which itself derived from the Medieval Latin 's oeconomia . The Latin word has its origin at the Ancient Greek 's oikonomia or oikonomos . The word's first part oikos means "house", and the second part nemein means "to manage". The most frequently used current sense, denoting "the economic system of
15367-429: The world's 11th highest per capita GDP (nominal) and the 13th highest per capita GDP (PPP) as of 2023 making it one of the highest earning nations in the world. Many of the world's largest tech companies are based in its capital Amsterdam or have established their European headquarters in the city, such as IBM , Microsoft , Google , Oracle , Cisco , Uber , Netflix and Tesla . Its second largest city Rotterdam
15494-405: The world. Griffiths argues that government policies made possible a unified Dutch national economy in the 19th century. They included the abolition of internal tariffs and guilds; a unified coinage system; modern methods of tax collection; standardized weights and measures; and the building of many roads, canals, and railroads. The rest of Europe in the 19th century saw the gradual transformation of
15621-617: The world. Of these, there are 16 exchanges with a market capitalization of $ 1 trillion or more, and they account for 87% of global market capitalization. Apart from the Australian Securities Exchange , these 16 exchanges are all in North America , Europe , or Asia . By country, the largest stock markets as of January 2022 are in the United States of America (about 59.9%), followed by Japan (about 6.2%) and United Kingdom (about 3.9%). A stock exchange
15748-561: The young Republic become the dominant trade power by the mid-17th century. In 1670 the Dutch merchant marine totalled 568,000 tons of shipping—about half the European total. The main reasons for this were the dominance of the Amsterdam Entrepôt in European trade, and that of the Dutch East India Company (or Verenigde Oost-Indische Companie – VOC) and West India Companies in intercontinental trade. These companies were based on
15875-424: Was discovered. Currently the Netherlands accounts for more than 25% of all natural gas reserves in the European Union . Over the following decades, the sale of natural gas generated a significant rise in revenue for the Netherlands. However, the unforeseen consequences of the country's energy wealth originally impacted the competitiveness of other sectors of the economy, leading to the theory of Dutch disease , after
16002-494: Was explored and discussed by Friedrich August von Hayek (1899–1992) and Milton Friedman (1912–2006) who pleaded for a global free trade and are supposed to be the fathers of the so-called neoliberalism . However, the prevailing view was that held by John Maynard Keynes (1883–1946), who argued for a stronger control of the markets by the state. The theory that the state can alleviate economic problems and instigate economic growth through state manipulation of aggregate demand
16129-548: Was shut down in 1997. In the 1970s, the Dutch chose a policy that required reprocessing all spent nuclear fuel . In 1984, the government decided to create a long-term (100 years) storage facility for all intermediate and low-level radioactive waste and research strategies for ultimate disposal. In September 2003, the Central Organization for Radioactive Waste created an interim storage facility for high-level waste . The Netherlands' only commercial nuclear reactor
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