Balanced Growth Facts
\(\dot k = 0\)
\(k = k*\)
Firm Behavior
Standard cost-minimization: the ratio of the marginal cost of the two inputs, labor and capital, must equal the ratio of the two marginal products of those inputs, \(\frac{w}{r}\) where w = wages and r = rental of capital.
Nominal vs. Real:
In terms of the interest rate, GDP, etc. the nominal rate is the real plus the expected inflation.