Scenarios for the Sustainability of the Current Account

• The required rate of depreciation of the RER in order to achieve sustainability on the current account depends on the required increase in ‘A’, on the values of import and export elasticities with respect to the RER, on the elasticity of imports with respect to aggregate demand, on the elasticity of aggregate demand with respect to RER, on the exports-imports ratio, and on the import-to-GDP ratio.