An attempt to use the tax system to replicate the effect of a deterioration in the exchange rate in those countries suffering from persistent current account deficits due to the common currency in a currency area. Essentially, this can be achieved by – raising import taxes and – lowering duties on export goods. However, such measures cannot replace an overall adjustment of the country to the level of international competitiveness. – See Balassa index, fiscal pact, trade balance, import content, degree of openness, structural change, terms of trade, growth contribution, competitiveness status, international, balance of payments. – Cf. ECB Monthly Bulletin, December 2011, pp. 110 et seq. (presenting individual fiscal measures; weighing their success).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/

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