Williamson - Macroeconomics, 5th Edition, Part VII

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Notation a = capital share in national income a = worker’s bargaining power (Chapter 6) a = fraction of defaulting borrowers in the credit market (Chapter 10) b = unemployment insurance payment (Chapter 6) b = productivity of labor in producing human capital (Chapter 8) c = individual current consumption d = depreciation rate e = matching efficiency (Chapter 6) em(Q, A) : matching function (Chapter 6) e = nominal exchange rate (Chapter 16)  f  = per worker production function  g = function describing the relationship between current population and future population in the Malthusian growth model h = time available to the consumer i = inflation rate ie = anticipated inflation rate  j = labor market tightness k = capital per worker l = leisure l = land per worker (Chapter 7) n = labor force growth rate  p = price of housing (Chapter 10)  pc = probability of finding work for a consumer  p f  = probability for a firm of finding a match with a worker q = price of credit card balances r  = real interest rate r  =  world real interest rate r 1 = real interest rate at which consumers can lend r 2 = real interest rate at which consumers can borrow s = savings rate (Chapters 7 and 8) t = tax rate (Chapter 5) t = current lump sum tax paid by the individual (Chapter 9) t = fraction of early consumers (Chapter 17) u = unemployment rate u = time spent producing consumption goods (Chapter 8) v = vacancy rate w = real wage we = lifetime wealth  x = money growth rate  y = individual current income z = total factor productivity  A = number of active firms B = bonds issued by the government C  = aggregate consumption CA = current account surplus D = government deficit E = employment G = government expenditures GDP = gross domestic product GNP = gross national product H = human capital (Chapter 8) H = quantity of housing held by consumer (Chapter 10) ∗

I = investment INT  = interest paid to the government K  = capital stock KA = capital account surplus (Chapter er 7) L = quantity of land (Chapt L = loan quantity chosen by a good borrower (Chapter 10) L = real money demand function (Chapter 12) M = money supply MC (I) = marginal cost of investment MB(I) = marginal benefit from investment MPC  = marginal propensity to consume MPK  = marginal product of capital MPN  = marginal product of labor MRS x  x  for  y.  x,, y  y =  marginal rate of substitution of  x MRT  x  x  for  y .  x,, y  y =  marginal rate of transformation of  x MU c = marginal utility of consumption N  = employment NFP = net factor payments NL = number not in the labor force NX  = net exports P = price level P = foreign price level PPF  = production possibilities frontier P(Q) = supply curve for searching workers Q = labor force R  = nominal interest rate S = aggregate savings S p =  private savings S g = government savings T  = total taxes TOT a,b = terms of trade or world price of  a  a  in terms of  b  b TR  = aggregate transfers from the government U  = number of unemployed U  = utility function (Chapter 17) V  = present value of profits W  = nominal wage  X  = credit card balances, in real terms Y  = aggregate real income Y d =  disposable income Y T  =  trend level of output p =  profits ∗

Notes • Primes denote future variables, for example C  denotes the future level of aggregate consumption. •   A superscript - denotes variables for the previous period, for example B are bonds acquired in the previ previous ous period in Chapte Chapterr 12. •   A superscript  d  denotes demand, for example N d is labor demand. •   A superscript  s  denotes supply, for example N s is labor supply. • In Chapters 7 and 8, lower case letters are variables in per-worker per-worker terms. œ

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