Three possibilities come to mind: the current account and/or trade balance, the exchange rate (or pattern in exchange rates around the world), and economic performance abroad. Even thinking of the external measures as domestic objectives raises questions. With respect to the current account, we should begin by separating cyclical and structural movements.
Cyclical movements in net exports contribute the economy’s built-in stability and are therefore quite desirable. Changes in the structural current account balance may contribute to or interfere with broader domestic objectives, depending on circumstances. The fundamental source of a structural current account deficit is domestic spending in excess of domestic production. Is this good or bad? The answer is: it depends.