Is the euro zone the last mercantilist region?

The United States is a fairly closed economy and has a chronic external deficit; China is an increasingly closed economy where growth now depends primarily on domestic demand. Only the euro zone still has a de facto mercantilist strategy: highly open economy with a growing dependence on global trade, a strategy of exchange rate depreciation and a chronic external surplus. Like China since 2013, the euro zone will have to abandon this strategy, given companies’ return to regional value chains and consumers’ growing national preference. T his will require economic policy in the euro zone to stimulate domestic demand, tak e back its savings, reshor e production and accept an appreciation of the exchange rate.