1. Klemann@fhk.eur.nl Hein A.M. Klemann
German Dutch Monetary Relations,

2. Monetary policy after 1945
Target: strong international competitiveness
Stable monetary relations with Germany:
Already before ECU, Guilder linked to D-mark
Monetary stability with most important trading partner
Keeping internal price levels low
From : Coordinated wage policy
1960s: Tensions on labour market too strong
1982: Agreement of Wassenaar
Pleading for wage restrain almost a Pavlov reaction in times of economic problems
Katzenstein: typical for small, highly developed open economies.

3. Table 1: The importance of German trade for the Netherlands, 1862-1938
Trade in per cent of the Dutch GDP
Trade with Germany in per cent of total Dutch trade
Trade with Germany in
per cents of the Dutch GDP
Imports
Exports
Total
1862 43 86 14 23 6 10 16
1875 64 62
126 22 28
1910 71
133 42 47 30 60
1921 31 24 55 18 7 4 11
1925 32 75 26 8
1929 74 17
1933 25 15 40 21 3
1938 27 20 9
Sources: CBS, Tweehonderd jaar statistiek in tijdreeksen, (Voorburg 2001); CBS, Zeventig jaren statistiek in tijdreeksen, (The Hague 1970); ‘Economische nalezingen en berigten’, in De Economist, 1864, 41-44; I.J. Brugmans, Paardenkracht en mensenmacht. Sociaal-Economische geschiedenis van Nederland (Den Haag 19692) 386; Own calculations.

4. Causes of importance Germany in from 1890s on
Growth of German heavy industry:
Imports of raw materials and foodstuffs of growing importance
Exports of coal grew spectacularly
From 1890 on, transport by barge became rapidly cheaper than competing ways of transport
For mass transport Rhine more important than rail
Rotterdam more important than Antwerp

5. Graph 1 Cost of transport 1870-1913, 1870=100

6. Graph 2 Nominal exchange rates 1870-1939

7. Graph 3 Internal price development 1870-1913. 1870=100

8. Graph 4 Real Exchange rates 1870-1913

9. Graph 5 Internal price levels 1892=100

10. Graph 6 Real exchange rate Mark in guilders. Gold parity=100
Graph 6 Real exchange rate Mark in guilders. Gold parity=100. Internal price levels 1913=100.

11. Graph 7 Purcasing power Dutch guilder in Germany, 1913=100

12. Graph 8 Real exchange rate of the Reichsmark, 1925-1939

13. Graph 9: Clearing between Germany and foreign countries
Germany Netherlands
German Exporters
Dutch Exporters
Exports
German Importers
Dutch Importers
Verrechnungskasse Berlin
Nederlandsch Clearing Instituut
Payments
Goods and services
Dotted arrows: Financial streams.
Strait arrows: Goods and services