External Balance defining the problem, policy implemented to deal with the problem of external stability.

EXTERNAL STABILITY External stability or external balance is a general term which describes a situation where external indicators such as the balance of payment, foreign liabilities and the exchange rate are at a sustainable level, that is, a level where they can remain in the longer term without negative economic consequences. The past two decades saw the sweep in of globalisation, what was also seen as was the significant levels of external imbalance in Australia, …

…designed to raise efficiency of production in Australia so that firms can better compete on global markets, which in the long-term will improve Australia's Balance of Payment problems. It is difficult to assess the effectiveness of the government's approach to external stability in Australia. Improvements to long-term external problems take time, and it is important to view the longer term trends rather than focusing on the short-term peaks and troughs in the current account deficit.