Germany’s first trade deficit since the 1990s…
Before the summer break I gave an interview to the New York-based Global Finance Magazine about what the first German trade deficit in almost three decades means and whether it is reason for deeper worry.
The gist of my argument is that the German public has long fetishised its current account surpluses as a sign of strength. It was not. Our research with Iryna Stewen and Michael Stiefel highlights that high surpluses actually reflected some of Germany’s structural weaknesses and were far from being an unmitigated sign of strength. That also means that a one-off deficit is nothing to worry about. But could the move into deficit reflect deeper challenges to Germany’s growth model? This is indeed likely to be the case. Read the full article here: https://www.gfmag.com/magazine/julyaugust-2022/germany-trade-deficit-surprise
Mathias Hoffmann is Professor at the Department of Economics at the University of Zurich. His research focuses on the macroeconomic aspects of international financial integration and on the link between financial markets and the macro-economy more generally. His recent published articles include papers on the determinants of international capital flows and imbalances, the international transmission of business cycles, on international risk sharing, banking regulation, and housing markets. Prior to arriving in Zurich, he was Professor at the University of Dortmund in Germany and a Lecturer at Southampton University (UK). He holds a PhD in Economics from the European University Institute in Florence and obtained his undergraduate education in economics and mathematics at WHU School of Management, Brandeis University and the University of Bonn.
Mathias Hoffmann is affiliated with the University of Zurich’s research priority program in financial regulation (URPPP FinREG), a fellow of CESifo Munich and of the Centre for Applied Macroeconomic Analysis (CAMA) at the Australian National University, and has held visiting positions at the University of California at Berkeley, the Deutsche Bundesbank, the Bank of Finland, the Hong Kong Monetary Authority, the Bank for International Settlements, Norges Bank, Keio University and Stanford University.