* * *  1 Introduction Ladies and gentlemen It is a great pleasure to give the keynote speech at this conference on “Monetary Policy Challenges”, organised jointly by the Banque de France and the Deutsche Bundesbank. This joint conference has already become a tradition.
Finally, because any excess of national spending over income must be financed by foreigners, the current account deficit is equivalent to the net inflow of capital from abroad. This approach points to the surge of capital inflows into our economy as the key development underlying the emergence of the large external deficit.