Arbeitspapier
How to reduce Germany's current account surplus?
Germany has had a large and persistent current account surplus for the past almost two decades. We review different theoretical explanations of this phenomenon and conclude from the empirical litera-ture that Germany's external surplus reflects an imbalance that is a threat to macroeconomic stability at both the national and the international level. Interestingly, although intertemporal general equilibrium models highlight the role of private households in determining national current account positions, the increase in Germany's external balance for the most part is the reflection of larger financial balances of the corporate sector and the government. While the share of the national income going to the private household sector has declined dramatically since the early 2000s, the corresponding increase in the income share of the private corporate sector and the government was not accompanied by higher spending by these sectors on goods and services as a percentage of GDP. We discuss how the exter-nal surplus might be reduced through (a combination of) higher public and private demand for goods and services and shorter working hours.
- Language
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Englisch
- Bibliographic citation
-
Series: Working Papers ; No. 08/2020
- Classification
-
Wirtschaft
Personal Income, Wealth, and Their Distributions
Factor Income Distribution
Macroeconomics: Consumption; Saving; Wealth
Current Account Adjustment; Short-term Capital Movements
Open Economy Macroeconomics
- Subject
-
current account
external adjustment
sectoral balances
income distribution
- Event
-
Geistige Schöpfung
- (who)
-
Behringer, Jan
van Treeck, Till
Truger, Achim
- Event
-
Veröffentlichung
- (who)
-
Forum for a New Economy
- (where)
-
Berlin
- (when)
-
2020
- Handle
- Last update
-
10.03.2025, 11:47 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Behringer, Jan
- van Treeck, Till
- Truger, Achim
- Forum for a New Economy
Time of origin
- 2020
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