Symbols & Notations



¯ : Fixed
~ : Changing.



I: Income
I(w1): Income at wage rate 1
U: Utility level OR Utility Indifference Curve
L: Leisure hours
W: Hours Worked
W: Nominal wage rate
w: Real wage rate OR W/P
P: Price level
I.E: Income effect
S.E: Substitution effect
L: Labor supplied OR Labor hours worked
LS: Supply of labor
LD: Demand for labor
MCL: Marginal cost of labor
MPL: Marginal product of labor
Y: Output (Income)
A: Technology level OR Total Factor Productivity (TFP) level
PF: Production function
MPL’: Derivative of marginal product of labor with respect to L
MPK: Marginal product of capital
MPK’: Derivative of marginal product of capital with respect to K
F(.) OR f(.): Function of
δ: Depreciation rate
k: Capital per worker (K/L)
k*: Steady-state k
k-gold: Golden-rule k
n: Population growth rate
s: Saving rate (S/Y)
LRAS: Long-run aggregate supply
SRAS: Short-run aggregate supply
AS: Aggregate supply
AD: Aggregate demand
FE: Full employment
Y¯ of Y of FE: Output level at full employment
PE: Price expectation
MS¯: Money supply
M0: Sum of currency in circulation (notes and coins) plus banks' reserves with the central bank
M1: Currency in circulation plus current (checking) accounts plus deposit accounts transferable by checks
i: Nominal interest rate
r: Real interest rate
MD: Money demand (Demand for money)
LM: Liquidity-Money equilibrium curve
L(Y, i): Liquidity function
S: National saving
I: National investment
IS: Investment-Saving curve
K: Capital stock
UC: User cost of capital
E: Expenditures
G: Government Expenditures
I(r1): Investments made at the interest rate “r1”
C: Consumption
π: Inflation rate
U: Unemployment rate
U¯: The natural rate of unemployment
LRPC: Long-run Philips curve
SRPC: Short-run Philips curve