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Rest of the world and expensive for the rest of the world

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Reference no: EM132008000

Germany is a net creditor nation where the Germans own more assets in the rest of the world than the rest of the world owns assets in Germany. The German external surplus is directly caused by: (a) years of German households buying Audis, Mercedes, BMWs, and other German luxury cars. (b) years of large German government budget surpluses. (c) the high value of the Euro, which makes it cheap for Germany to buy assets in the Rest of the World and expensive for the Rest of the World to buy German assets. (d) years of large German trade and current account surpluses.

Reference no: EM132008000

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