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That is the immediate question. I say that isn't the case and Jake tries to disprove this by talking about what happens with a CA deficit and no nominal growth in infinite time period.
It would really make this discussion a lot easier if you would make the effort to recall the chain of reasoning back more than three posts when you play these annoying "gotcha" games.
A straw man, since I am talking about right now.
Which just proves you don't know the first thing about how to look at macroeconomic data. To obtain an estimate of the structural surplus/deficit, you have to average over at least a couple of business cycles.
You are arguing like a climate change denier who says "but we had a really cold winter in 1992, so global warming isn't happening!"
And of course a small CA deficit is sustainable about a long time period. The data you researched regarding Germany show that Germany had a CA deficit from 1990 until 2002 without any trouble.
From 1991 to 2001, actually. And that's not a long time period. It's the trough-to-peak of the 1990s business cycle.
It would also be more informative to look at the CA position of the former West Germany only, since there was a considerable exodus of industry from the former Eastern Bundesländer under the Kohl Ostmark peg that strongly resembles the exodus from the European periphery under the Schröder Drachma peg.
So my thesis is that a moderate CA deficit like France or Slovakia or Italy is no reason for worry.
And since France and Italy are already under attack, your hypothesis was falsified even before you proposed it.
As fail goes, that's a really impressive example.
Friends come and go. Enemies accumulate.
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