et invent be the real value inventories in the united states during year t, let gdpt denote real gross domestic product, and let r3t denote the (ex post) real interest rate on three-month t-bills. the ex post real interest rate is (approximately) r3t 5 i3t 2 inft , where i3t is the rate on three-month t-bills and inft is the annual inflation rate [see mankiw (1994, section 6-4)]. the change in inventories, cinvent , is the inventory investment for the year. the accelerator model of inventory investment relates cinven to the cgdp, the change in gdp: