Theory, Evidence, and Policy
Steady state or trend values are indicated by a sub(super)script ‘o . A dot over a variable x = x(t) denotes the time derivative, a caret its growth rate; x = dx/dt, x = x/x. As far as possible, the notation tries ˙ ˆ ˙ to follow the logic of using capital letters for level variables and lower case letters for variables in intensive form, or for constant (steady state) ratios. Greek letters are most often constant coeﬃcients in behavioral equations (with, however, the notable exceptions being the π’s, and ω). Moreover there is some ‘local’ notation which only applies to certain chapters of the book. B C E G I J K Ld Lw L M Sf Sg Sp S T Λf , Λg Dc , Dt Wn outstanding government ﬁxed-price bonds (priced at pb = 1) real private consumption (demand is generally realized) number of equities real government expenditure (demand is always realized) real net investment of ﬁxed capital (demand is always realized) Jacobian matrix in the mathematical analysis stock of ﬁxed capital employment, i.e., total working hours per year (labor demand is always realized) employed workforce, i.e., number of employed people labor supply, i.e., supply of total working hours per year stock of money supply real saving of ﬁrms real government saving real saving of private households total real saving; S = Sf + Sg + Sh total real tax collections debt of ﬁrms, government checkable and time deposits nominal wealth of private households 365 366 Y Yd c e U =1−e fx = f1...
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