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Q. Describe the macroeconomic variables?
In this section we have summarizes all the macroeconomic variables. The first column denotes the symbol we use for variable whereas column 2 shows the name of variable.
Variable
Variable name
Y
Real GDP
P
Price level
P.Y
Nominal GDP
U
Unemployment
L
Hours worked
K
Amount of capital
W
Nominal wage
W/P
Real wage
M
Money supply (nominal)
R
Nominal interest rate
r
Real interest rate
C
Private consumption (real)
I
Investments (real)
G
Government expenditure (real)
NT
Net tax (real)
X
Exports (real)
Im
Imports (real)
NX
Net exports (real)
SH
Household savings (real)
SG
Government savings (real)
SR
Rest of the world savings (real)
p
Inflation
pe
expected inflation
pw
Wage inflation
pM
Growth in money supply
E
Exchange rate
pE
Depreciation in exchange rate
Two of the variables are stock variables: K and M. Prices can't be characterized as a stock or flow variable. P, W, R, r and E apply at a given point in time whereas p, pe, pw and pE apply over a period of time. p, pw and pE are changes in P, W and E during previous time period while pe is the expected change in P during next time period. All the other variables are flow variables measured in some unit per unit of time (for instance, L is the number of hours worked per year or per any other unit of time).
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