In countries with an undervalued currency, for example, more flexible exchange rates would strengthen purchasing power and thus help to redirect growth from exports to domestic demand. This, however, is not a panacea and should be supplemented by structural reforms.
In China, for example, such reforms might include measures to improve social security, which would reduce precautionary household saving, strengthen domestic demand and ultimately lead to a more balanced current account. Economies with persistently large current account deficits, on the other hand, should adopt measures to support saving.