Overbar

denotes a parameter or exogenous value

denote a parameter or exogenous value

Overbar

star *

solution to model or steady-state value

solution to model or steady-state value

star *

(a-bar)

aggregated demand shock

aggregated demand shock

(a-bar)

(A-bar)

total factor of productivity

total factor of productivity

(A-bar)

(b-bar)

sensitivity of investment to interest rate

sensitivity of investment to interest rate

(b-bar)

(d-bar)

rate at which capital depreciates

rate at which capital depreciates

(d-bar)

g_{x}

growth rate of x

growth rate of x

g_{x}

i

nominal interest rate

nominal interest rate

i

I_{t}

investment

investment

I_{t}

k_{t}

capital per person

capital per person

k_{t}

(o-bar)

Price shock of Phillip's Curve

Price shock of Phillip's Curve

(o-bar)

P_{t}

Price Level

Price Level

P_{t}

π_{t}

inflation rate during the year(t)

inflation rate during the year(t)

π_{t}

(r-bar)

marginal product of capital

marginal product of capital

(r-bar)

L_{t}

Labor Force

Labor Force

L_{t}

C_{t}

consumption

consumption

C_{t}

(s-bar)

investment rate in the Solow Model

investment rate in the Solow Model

(s-bar)

R_{t}

Real interest rate

Real interest rate

R_{t}

w

wages

wages

w

y_{t}

output per person

output per person

y_{t}

(Y-bar_{t})

potential output

potential output

(Y-bar_{t})

(Y~_{t})

short-run output

short-run output

(Y~_{t})