Filippo di Mauro, Arne Nagengast, Robert Stehrer, 29 January 2016

Now that the worst of the Eurozone Crisis has passed, one question that emerges is whether improving current account balances should be an objective for policymakers. And if so, what tools are available? This column argues that because of the emergence of global value chains, trade imbalances within the Eurozone are to a large extent an endogenous result of the international organisation of production at the firm level. It is therefore better to disregard intra-EZ imbalances and focus on the total.

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