Macroeconomic Policy goals in an Open Economy Problems with Excessive current Account Deficits. They sometimes represent temporarily high consumption resulting from misguided government policies They can undermine foreign investors' confidence and contribute to a lending crisis Copyright C 2003 Pearson Education, Inc Slide 18-8Copyright © 2003 Pearson Education, Inc. Slide 18-8 • Problems with Excessive Current Account Deficits: – They sometimes represent temporarily high consumption resulting from misguided government policies. – They can undermine foreign investors’ confidence and contribute to a lending crisis. Macroeconomic Policy Goals in an Open Economy