Assume that in the steady state the real interest rate is = 3.5% and the real growth rate is = 2%. Calculate the primary surplus that, in steady state, will deliver a sustainable debt of 99% of GDP (as in 2020). What about for a 78% debt-to-GDP ratio (as in 2016)? Explain the difference.
ASSIGNMENT The fiscal response to the COVID crisis increased debt in many countries. As we emerge from this crisis many are worried if current debt levels are sustainable. In this exercise, we will use data from Country X to undertake a debt sustainability analysis. use the excel template provided to answer the following questions. Also […]