Scenarios for the Sustainability of the Current Account

Using the parameter values and the forecasted values of the relevant variables we solve the difference equation for the value of debt-to-GDP ratio in period 2016.
We then consider the value of this debt-to-GDP ratio discounted to 2006, and compare it with the actual value of debt-to-GDP ratio in 2006.
We note that the discounted value of debt-to-GDP ratio is larger than the actual value of debt-to-GDP ratio.

Using the parameter values and the forecasted values of the relevant variables we solve the difference equation for the value of debt-to-GDP ratio in period 2016.