Equation 6 indicates that consumer debt accumulates in a procyclical fashion. If we consider the system composed of equations 1 to 6, with 2 replaced by 2’, we now have a system with a potential vulnerability in the form of debt; this system (System B) was used to build Figure 2.
Beyond the next couple of years, the future is harder to predict, but there is no reason at this stage to doubt that past patterns will be repeated and that growth will pick up again. Australia remains, after all, a very dynamic economy. The outcomes in Australia will, as usual, be influenced to some degree by global developments.