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Are Germans wasting their savings abroad?

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  • Busse, Matthias
  • Gros, Daniel

Abstract

Germany is running a current account surplus of about 8% of GDP, which means that about one-third of all German savings (equal to 24% of GDP) has to be invested abroad every year. It has become by now almost a cliché that these huge excess savings are being wasted abroad. But this is a popular misconception based on the divergence between the available data on the (cumulated) current account balance (cCAB) of Germany and its net international investment position (NIIP). A closer look at the data actually suggests that the NIIP is probably not measured correctly and that the observed returns on German investment abroad have remained above most domestic returns.

Suggested Citation

  • Busse, Matthias & Gros, Daniel, 2016. "Are Germans wasting their savings abroad?," CEPS Papers 11449, Centre for European Policy Studies.
    • Handle: RePEc:eps:cepswp:11449
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    File URL: https://www.ceps.eu/system/files/PrtV_GermansSavingsAbroad.pdf
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    References listed on IDEAS

    as
    1. S. Bach & G. Baldi & K. Bernoth & J. Blazejczak & B. Bremer & J. Diekmann & D. Edler & B. Farkas & F. Fichtner & M. Fratzscher & M. Gornig & C. Kemfert & U. Kunert & H. Link & K. Neuhoff & W.-P. Schil, 2013. "Deutschland muss mehr in seine Zukunft investieren," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 80(26), pages 3-5.
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    Cited by:

    1. Micossi, Stefano, 2016. "Balance-of-Payments Adjustment in the Eurozone," CEPS Papers 11250, Centre for European Policy Studies.

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