Macroeconomics

Solow growth model:

A model showing how

saving, population growth, and technological

progress determine the level of and growth in the

standard of living.

Solow residual:

The growth in total factor pro-

ductivity, measured as the percentage change in out-

put minus the percentage change in inputs, where

the inputs are weighted by their factor shares. (Cf.

total factor productivity.)

Speculative attack:

The massive selling of a coun-

try’s currency, often because of a change in investors’

perceptions, that renders a fixed-exchange rate 

untenable.

Stabilization policy:

Public policy aimed at reduc-

ing the severity of short-run economic  fluctuations.

Stagflation:

A situation of falling output and rising

prices; combination of stagnation and inflation.

Steady state:

A condition in which key variables

are not changing.

Sticky prices:

Prices that adjust sluggishly and,

therefore, do not always equilibrate supply and de-

mand. (Cf. flexible prices.)