The Behavior of U.S. Short-Term Interest Rates Since October 1979

Short-term interest rates in the United States have been "too high" since October 1979 in the sense that both unconditional and conditional forecasts, based on an estimated vector autoregression model summarizing the prior experience,under predict short-term interest rates during this period. Although a non-structural model cannot directly answer the question of why this has been so,comparisons of alternative conditional forecasts point to the post-October 1979 relationship between the growth of real income and the growth of real money balances as closely connected to the level and pattern of short-term interestrates. This finding is consistent with the authors' earlier conclusion, based on analysis of a small structural macroeconometric model, that the high average level of interest rates has been due to a combination of slow growth of (nominal)money supply and continuing price inflation, which together have kept real balances small in relation to prevailing levels of economic activity.

Learning the Right Lessons from Iraq

Foreign policy experts and policy analysts are misreading the lessons of Iraq. The emerging conventional wisdom holds that success could have been achieved in Iraq with more troops, more cooperation among U.S. government agencies, and better counterinsurgency doctrine. To analysts who share these views, Iraq is not an example of what not to do but of how not to do it. Their policy proposals aim to reform the national security bureaucracy so that we will get it right the next time. The near-consensus view is wrong and dangerous. What Iraq demonstrates is a need for a new national security strategy, not better tactics and tools to serve the current one. By insisting that Iraq was ours to remake were it not for the Bush administration's mismanagement, we ignore the limits on our power that the war exposes and in the process risk repeating our mistake. The popular contention that the Bush administration's failures and errors in judgment can be attributed to poor planning is also false. There was ample planning for the war, but it conflicted with the Bush administration's expectations. To the extent that planning failed, therefore, the lesson to draw is not that the United States national security establishment needs better planning, but that it needs better leaders. That problem is solved by elections, not bureaucratic tinkering. The military gives us the power to conquer foreign countries, but not the power to run them. Because there are few good reasons to take on missions meant to resuscitate failed governments, terrorism notwithstanding, the most important lesson from the war in Iraq should be a newfound appreciation for the limits of our power

Why Have Short-Term Interest Rates Been So High?

macroeconomics, short-term, interest rates

A simple 5-DOF walking robot for space station application

Robots on the NASA space station have a potential range of applications from assisting astronauts during EVA (extravehicular activity), to replacing astronauts in the performance of simple, dangerous, and tedious tasks; and to performing routine tasks such as inspections of structures and utilities. To provide a vehicle for demonstrating the pertinent technologies, a simple robot is being developed for locomotion and basic manipulation on the proposed space station. In addition to the robot, an experimental testbed was developed, including a 1/3 scale (1.67 meter modules) truss and a gravity compensation system to simulate a zero-gravity environment. The robot comprises two flexible links connected by a rotary joint, with a 2 degree of freedom wrist joints and grippers at each end. The grippers screw into threaded holes in the nodes of the space station truss, and enable it to walk by alternately shifting the base of support from one foot (gripper) to the other. Present efforts are focused on mechanical design, application of sensors, and development of control algorithms for lightweight, flexible structures. Long-range research will emphasize development of human interfaces to permit a range of control modes from teleoperated to semiautonomous, and coordination of robot/astronaut and multiple-robot teams

The Behavior of U.S. Short-Term Interest Rates Since October 1979

Short-term interest rates in the United States have been “too high” since October 1979 in the sense that both unconditional and conditional forecasts, based on an estimated vector autoregression model summarizing the prior experience, underpredict short-term interest rates during this period. Although a non-structural model cannot directly answer the question of why this has been so, comparisons of alternative conditional forecasts point to the post-October 1979 relationship between the growth of real income and the growth of real money balances as closely connected to the level and pattern of short-term interest rates. This finding is consistent with the authors’ macroeconomic model, that the high average level of interest rates has been due to a combination of slow growth of (nominal) money supply and continuing price inflation, which together have kept real balances small in relation to prevailing levels of economic activity

Molecular and fossil evidence place the origin of cichlid fishes long after Gondwanan rifting.

Cichlid fishes are a key model system in the study of adaptive radiation, speciation and evolutionary developmental biology. More than 1600 cichlid species inhabit freshwater and marginal marine environments across several southern landmasses. This distributional pattern, combined with parallels between cichlid phylogeny and sequences of Mesozoic continental rifting, has led to the widely accepted hypothesis that cichlids are an ancient group whose major biogeographic patterns arose from Gondwanan vicariance. Although the Early Cretaceous (ca 135 Ma) divergence of living cichlids demanded by the vicariance model now represents a key calibration for teleost molecular clocks, this putative split pre-dates the oldest cichlid fossils by nearly 90 Myr. Here, we provide independent palaeontological and relaxed-molecular-clock estimates for the time of cichlid origin that collectively reject the antiquity of the group required by the Gondwanan vicariance scenario. The distribution of cichlid fossil horizons, the age of stratigraphically consistent outgroup lineages to cichlids and relaxed-clock analysis of a DNA sequence dataset consisting of 10 nuclear genes all deliver overlapping estimates for crown cichlid origin centred on the Palaeocene (ca 65-57 Ma), substantially post-dating the tectonic fragmentation of Gondwana. Our results provide a revised macroevolutionary time scale for cichlids, imply a role for dispersal in generating the observed geographical distribution of this important model clade and add to a growing debate that questions the dominance of the vicariance paradigm of historical biogeography

Models of helically symmetric binary systems

Results from helically symmetric scalar field models and first results from a convergent helically symmetric binary neutron star code are reported here; these are models stationary in the rotating frame of a source with constant angular velocity omega. In the scalar field models and the neutron star code, helical symmetry leads to a system of mixed elliptic-hyperbolic character. The scalar field models involve nonlinear terms that mimic nonlinear terms of the Einstein equation. Convergence is strikingly different for different signs of each nonlinear term; it is typically insensitive to the iterative method used; and it improves with an outer boundary in the near zone. In the neutron star code, one has no control on the sign of the source, and convergence has been achieved only for an outer boundary less than approximately 1 wavelength from the source or for a code that imposes helical symmetry only inside a near zone of that size. The inaccuracy of helically symmetric solutions with appropriate boundary conditions should be comparable to the inaccuracy of a waveless formalism that neglects gravitational waves; and the (near zone) solutions we obtain for waveless and helically symmetric BNS codes with the same boundary conditions nearly coincide.Comment: 19 pages, 7 figures. Expanded version of article to be published in Class. Quantum Grav. special issue on Numerical Relativit

Learning a Factor Model via Regularized PCA

We consider the problem of learning a linear factor model. We propose a regularized form of principal component analysis (PCA) and demonstrate through experiments with synthetic and real data the superiority of resulting estimates to those produced by pre-existing factor analysis approaches. We also establish theoretical results that explain how our algorithm corrects the biases induced by conventional approaches. An important feature of our algorithm is that its computational requirements are similar to those of PCA, which enjoys wide use in large part due to its efficiency