ABSTRACT
Mercantilist views, dating from the sixteenth to nineteenth centuries, held that governments should intervene to encourage a surplus on the trade balance because the state could profit from the resulting accumulation of precious metals. Although it is improbable that such views are at all influential today, there are still many who believe that government intervention should be used to affect trade and current account balances and the resulting net foreign indebtedness. Proposals for intervention can range from full scale macroeconomic measures to achieve external and internal balance targets, through public intervention to raise the national saving rate, to tailored remedies for specific externalities.
