Actual versus Simulated Gross Public Debt Ratios in Selected Advanced Economies in 2011
Source: IMF Staff calculations and WEO database.Note: The simulation uses actual data for 2007 as the starting point. We use a first year multiplier of 1, which slowly declines to zero after five years. We assume that the underlying trend growth rate is 2008 potential growth. We then add to the baseline the cumulative effects of discretionary fiscal policy, which we proxy by the annual changes in the structural primary balance ratio. The structural balance is extracted from the WEO database.
|2007 Actual||2011 Actual||2011 Simulated|