Germany's Current Account and Trade Surpluses

During the past decade, macroeconomic imbalances – typified by countries’ surplus or deficit of exports, currency, or capital – have moved to the fore of international economic policy debates. Global events and developments, such as China’s integration into the world economy, the 2008 financial crisis, and the Eurozone crisis, have created, and in some cases, compounded longstanding trade and investment asymmetries around the world. These imbalances have no single cause, but are fostered and magnified by the competitiveness of a country’s industries, domestic demand, corporate investment decisions, and tax and monetary policy, among other factors. In recent years, the widening gaps in countries’ trade relationships have become highly politicized, prompting policymakers to respond with measures ranging from formalized monitoring to punitive tariffs.