The global debate about macroeconomic imbalances has become a misdirected critique of Germany’s spending habits and approach to trade. While political calculations may prompt Germany to think differently about its current-account surplus, there is no compelling economic reason to alter the status quo.
MUNICH – The debate about global macroeconomic imbalances is increasingly focusing on Germany’s current-account surplus and economic policy. Despite the vitality of the German economic engine, and the role it plays in fueling growth and maintaining stability in the eurozone, criticism of the country’s massive external surplus is mounting. As the Economist put it recently, Germany “saves too much and spends too little,” making it “an awkward defender of free trade.”
MUNICH – The debate about global macroeconomic imbalances is increasingly focusing on Germany’s current-account surplus and economic policy. Despite the vitality of the German economic engine, and the role it plays in fueling growth and maintaining stability in the eurozone, criticism of the country’s massive external surplus is mounting. As the Economist put it recently, Germany “saves too much and spends too little,” making it “an awkward defender of free trade.”