The fact that some episodes of current account deficits and rising relative prices could be natural economic adjustments to shocks that hit the economy does not, of course, imply that all such episodes are benign, equilibrium phenomena.
Looking at developments in a number of euro area countries over the past 11 years, we have enough evidence of private sector imbalances that cannot be explained by reference to benign equilibrium phenomena. How could such imbalances come about?