Current account balances and international economic policy coordination

The existing balances on the current accounts of the major industrialised countries have given rise to demands, addressed particularly to German economic policy-makers, which amount to a revitalisation of the “locomotive theory”. However, were the world economy once more to be “reflated” in accordance with the “locomotive theory”, there would be a danger that the improvements in stability which have been attained would be sacrificed without actually solving the pressing international economic problems.