The December 4th, 2004 issue of “The Economist” had a 3-page Special Report
entitled “The future of the dollar” which cites the following from the Roubini-Setser (R-S) paper ; “if the real trade-weighted value of the dollar remains close to its average in 1990-2003 ( slightly above current levels ) and there is no change in domestic policy, America’s current-account deficit would rise to 8% of GDP in 2008 and its net debt would increase to over 50% of GDP”. This projection came from one of three scenario simulations ( their Baseline scenario ) based on a model described in the R-S paper. The R-S paper’s model, when replicated in Vensim, contains one positive feedback loop to represent how interest on debt leads to exponential debt growth but excludes much of the of the paper’s rich mental models which imply much more endogenous model structure than that used in the paper’s scenario simulation model. This SD conference paper recreates the R-S scenario simulation model and then presents another version which tries to include more endogenous model structure based on the R-S paper’s own rich discussion and mental models.