d = d –1 (1 + i)/(1 + g) + p.  (A3)  If there is stability in the debt-to-GDP ratio, d = d –1 = d. Then d (1 – (1 + i)/(1 + g)) = p  (A4)  and d (g – i)/(1 + g) = p  (A5)  This is equation 2 in the text.
Note that if i = g, p must equal 0. If d is positive and i > g, p must be less than zero, a primary surplus. If d is positive and i < g, p can be greater than zero, a primary deficit. BIS Review 12/2004  7