Eichengreen, Barry, (2017), “Is Germany Unbalanced or Unhinged?”, Project Syndicate, 11 May
For US President Donald Trump, the measure of a country’s economic strength is its current-account balance – its exports of goods and services minus its imports. This idea is of course the worst kind of economic nonsense. It underpins the doctrine known as mercantilism, which comprises a hoary set of beliefs discredited more than two centuries ago. Mercantilism suggests, among other things, that Germany is the world’s strongest economy, because it has the largest current-account surplus.
Relevant Posts
- Fratzscher, Marcel, (2017), “Germany’s Misunderstood Trade Surplus”, Project Syndicate, 7 March
- den Haan, Wouter, Ellison, Martin, Ilzetzki, Ethan, McMahon, Michael, Reis, Ricardo, (2016), “The danger of Germany’s current account surpluses: Results of the CFM and CEPR Survey”, VoxEu, 27 October