Policy Article

Economic, financial and monetary policy: effects on the German current account

Kieler Beiträge zur Wirtschaftspolitik, 11

The persistently high German current account surpluses are subject to increasing international criticism based on the presumption that they are negative for both domestic and foreign economies. Against this backdrop, the authors have studied the effect of eight economic policy measures on the current account balance using the global macroeconometric model NiGEM. They conclude that German policy-makers lack adequate policy measures to reduce the current account surplus.