In the model that we developed over the last four chapters, we described the economy's macroeconomic equilibrium as a short-run one. In Chapter 4, we distinguished between the short run and the long run based on the roles of the production technology and the capital stock. In the short run, we took the production technology and aggregate capital stock as given during the period of the analysis. Our reason for holding these variables constant was that they tend to change very slowly over time, relative to the other variables in our model. But as we further developed our model in the subsequent chapters, these were not the only variables that we took as given. When we analyzed the determination of aggregate supply in Chapter 5, for example, we focused on a situation in which wage inertia caused the nominal wage to change slowly, so that the current nominal wage was partly determined by its past history. Moreover, when describing the determination of equilibrium in domestic asset markets in Chapter 6, we introduced two important financial stocks: the economy's net international investment position and the domestic government's outstanding debt (which together sum to the financial net worth of the domestic private sector). In the short run, these financial stocks were also assumed to be constant because the changes that they undergo during any given year are likely to be very small compared to the accumulated stocks that are inherited from the economy's entire past history.