tutor2u | German trade surplus hits record high

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German trade surplus hits record high

Graham Watson

10th February 2017

For those of you who know your Keynesian economics, this might set alarm bells ringing. Keynes was a believer that trade imbalances were problematic but that rather than deficit coutnies being under pressure to correct their deficits, it should be surplus countries that sought to reduce their surpluses.

And thus the news of the German trade surplus, whilst it might be good news for Germany, might not be good news for the Eurozone, as President Trump's trade advisor, Peter Navarro, has made clear.

And he has a point: if Germany has such a large surplus, how can deficit countries, like Greece, be expected to reduce their deficits?

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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