8 Basic Example Calculations for the FRG
For a first demonstration of the effectiveness
of the so-accounted system, we make some further simplifications permitted. We
assume that the foreign balance is relatively equal, and therefore use 
. Furthermore,
the relatively low population growth in the FRG can be set to
. The savings
rate in the BRD leveled most of the time by a value
of about 10% annually, so we can start with a flat constant 
. The values for 
and 
can be determined
from the real data series. 
is the average long-term nominal
interest rate on all assets. Thus we can write now:
(8.1)
and we we get the simplified19 equation system as
(8.2 a)
(8.2 b)
which now only contains the
core effects and is therefore suited best to a first examination of the most
important relationships. With the constant values 
and
and 
we
get the already very good agreement between theory and reality in its simplest
form (Figure 5 and Figure 6):
