Scenarios for the Sustainability of the Current Account

Solving the difference equation for the value of debt-to GDP ratio in 2016 we note that under minimal requirements on sustainability the debt-to-GDP ratio increases over time.
When the effect of changes in RER on debt-to-GDP ratio is also taken into account, we find out that the increase in debt-to-GDP ratio is much more than in the initial case.

Solving the difference equation for the value of debt-to GDP ratio in 2016 we note that under minimal requirements on sustainability the debt-to-GDP ratio increases over time.