Results for “puffin” 69 found
Assorted links
1. Rent-seeking behavior, and another perspective on the incident. Here's the best narrative.
2. The FDIC lotto.
3. Open access publishing takes off in economics.
4. It is better when the wife is more attractive.
5. American cities with the most Haitians.
6. Are there 700,000 traumatic injuries in Haiti?
Assorted links
1. How lawyers should select jurors — treat them like blind dates.
2. Happy and sad.
3. One proposal for The Grand Bargain.
4. 100 greatest science fiction and fantasy novels?
6. Via Bob Cottrell, ATM skimmers.
Assorted links
2. One attempt to estimate an "imaginary Europe," along with other Europe-U.S. comparisons.
3. Papers about the U.S. are more likely to be published.
4. Charles Rowley on macroeconomics: a personal anecdote which reflects his approach to economics.
5. Why we sit through movie previews.
6. Via Chris F. Masse, why hasn't scientific publishing already been revolutionized?
Assorted links
1. Weekly word cloud from the econ blogs.
2. China mixed messages of the day.
3. Is Obama leaning toward a health care mandate?
4. Only six percent of TV stimulus commentators are economists.
5. Puffins on YouTube, with Icelandic puffin souvenirs.
Right-wing radicals who wish to rethink the stimulus
This was from a story in The Washington Post:
In testimony before the House Budget Committee yesterday, Alice M.
Rivlin, who was President Bill Clinton's budget director, suggested
splitting the plan, implementing its immediate stimulus components now
and taking more time to plan the longer-term transformative spending to
make sure it is done right.
"Such a long-term investment program should not be put together
hastily and lumped in with the anti-recession package. The elements of
the investment program must be carefully planned and will not create
many jobs right away," said Rivlin, a fellow at the Brookings
Institution. The risk, she said, is that "money will be wasted because
the investment elements were not carefully crafted."
It's not a puffin, but here is a good post on the stimulus from Arnold Kling. And read Marc Ambinder on which parts of the bill will take how long.
Keynes’s General Theory, chapter six
Keynes does all this huffing and puffing about terms and finally he stumbles into his mention of Hayek. Hayek had written some now-obscure articles about net investment and measures of the capital stock, reprinted in Profits, Interest, and Investment. (Here is an excellent Lawrence H. White essay on this part of Hayek’s thought.) Keynes wants to show he doesn’t have to worry about these debates. Keynes is also trying to liberate himself from his previous (1930) two-volume Treatise on Money, a disappointing work. At the end of section (i) you get the clincher: "For this reason, and also because I no longer require my former terms to express my ideas accurately, I have decided to discard them — with much regret for the confusion which they have caused."
Again, in part ii the bombshell comes, unannounced. Keynes decides that he will declare savings to be a "mere residual." Consumption and investment alone will determine income and savings is defined as whatever is left over to make the national income equations balance.
At the time this was considered by many to be an enormous sleight of hand. The Austrian and Swedish traditions focused on the question of whether planned savings was going to equal planned investment and what happens if not. Keynes has just banished such questions to the woodshed and he has done so by a terminological maneuver.
Whether or not you think that the Austrian and Swedish traditions lead anywhere fruitful, Keynes is on shaky ground here. He is using definitions to favor one causal account of macro over another. That’s not right. You can still make a plausible argument that Keynes is right on empirical grounds that planned savings is not an important force for understanding business cycles. But so far no such empirical argument has been clinched.
In the second to last paragraph Keynes realizes that in his system savings does not and cannot constrain investment. He notes that if animal spirits were wild enough, the price of output could fluctuate between zero and infinity. Neither interest rates nor savings plans perform any of their traditional constraining or equilibrating functions. At least Keynes realized how far out on a limb he was going.
Due to popular request, we’ll resume with the Keynes symposium in January but take a break for the close of the semester.
Interpreting the Monetary Base Under the New Monetary Regime
The monetary regime has changed and, as a result, many people are misinterpreting the recent increase in the monetary base. Paul Krugman, for example, posts the picture 
at right. His interpretation is that the tremendous increase in the base shows that the Fed is trying to expand the money supply like crazy but nothing is happening, i.e. a massive liquidity trap. (Krugman is not alone in this interpretation, see e.g. this post by Bob Higgs). Thus, Krugman concludes, Friedman was wrong both about monetary history and monetary theory.
Krugman’s interpretation, however, neglects the fact that the monetary regime changed when the Fed began to pay interest on reserves. Previously, holding reserves was costly to banks so they held as few as possible. Since Oct 9, 2008, however, the Fed has paid interest on reserves so there is no longer an opportunity cost to holding reserves. The jump in reserves occurred primarily at this time and is entirely under the Fed’s control. The jump in reserves does not represent a massive attempt to increase the broader money supply.
Here’s a bit more background. When no interest was paid on reserves banks tried to hold as few as possible. But during the day the banks needed reserves – of which there were only $40 billion or so – to fund trillions of dollars worth of intraday payments. As
a result, there was typically a daily shortage of reserves which the Fed made up for by extending hundreds of billions of dollars worth of daylight credit. Thus, in essence, the banks used to inhale credit during the day – puffing up like a bullfrog – only to exhale at night. (But note that our stats on the monetary base only measured the bullfrog at night.)
Today, the banks are no longer in bullfrog mode. The Fed is paying interest on reserves and they are paying at a rate which is high enough so that the banks have plenty of reserves on hand during the day and they keep those reserves at night. Thus, all that has really happened – as far as the monetary base statistic is concerned – is that we have replaced daylight credit with excess reserves held around the clock. The change does not represent a massive injection of liquidity and the increase in reserves should not be interpreted as evidence of a liquidity trap.
Addendum: (For the truly wonkish.) If you want more, see my earlier post on excess reserves, posts by Jim Hamilton, and David Altig, and especially two very useful Fed articles, Keister, Martin, and McAndrews (n.b. the last section) and Ennis and Weinberg.
Why blogs should cover some topics randomly
Think of a blog as competing with both Google and Wikipedia, among other aggregators. If you knew you wanted to read about "the minimum wage," you could bypass Tyler and Alex and Google to the best entries (some of which might include us, of course). But with Google and Wikipedia you must choose the topic. A good blog writer can randomize the topic for you, much like a good DJ controls the sequence of the music. Sometimes you might trust us more than you trust other aggregators, but we can’t count on that and arguably the other aggregators improve at a rate faster than we do.
Machu Picchu: Thoughts and Recommendations
Machu Picchu illustrates the real estate adage, location, location, location. Everywhere you look you are assaulted by beauty. For the mathematicians, MP sits on a saddlepoint so if you look North (I’m not sure of the directions but you will get the idea) you see one mountain, turning South you see another, on the East is a sheer cliff falling onto a river, on the West another cliff falling down onto the tiny town of Agua Calientes. Even further out on the East and West horizons are snow-capped peaks. And then there are the ruins themselves, majestic and mysterious. The picture to the right, taken from Putucusi (see below) gives some idea of the location but no picture can take your breath away like the real thing (or perhaps that was just the altitude!). Click to expand.
Adding to the magic is the fact that getting to MP is still relatively difficult. The most common route is by train from Cusco. It’s only 68 km but takes over 3 hours because the train must go backwards and forwards along trackbacks to make it up some of the steep terrain. The ride is not boring, however, as it takes you through mountain ranges alongside a raging river. As you get further and further into the Andes you begin to understand why MP was not formally discovered until 1911. At Agua Calientes you board a bus which takes you on a one-lane dirt road up the mountain. There are no guard rails on the road and the bus drivers periodically have to slam on the brakes as they meet one of their fellows coming in the opposite direction – one of them then has to back up to let the other pass. True, trains and buses are not the stuff of Indiana Jones but neither is this like negotiating the traffic of Rome in order to see the colliseum, there is a definite sense of exploration.
The ruins are a tourist site, of course, but the poverty of Peru means there are few guard rails, plaques or tour guides pushing you on (you can hire a local guide if you want). Again, to me at least, the experience was more like exploring ruins than visiting ruins.
Recommendations
My most important recommendation is to stay the night in Agua Calientes. Most people come in from Cusco for the day – what this means is that they don’t arrive at the site until about 10:30 and they leave by 2:30 to catch the 3:30 train back to Cusco. Outside of these times there are surprisingly few tourists. If you stay the night you won’t have MP to yourself but in the morning or late afternoon you will be able to explore at leisure and take pictures of the site sans tourists.
On the morning of my second day, I climbed the mountain opposite MP, Putucusi, and had the whole mountain to myself on the climb and the summit. Only on the way down in the afternoon did I meet others.
I recommend climbing both Huayna Picchu and Putucusi (but not on the same day!). 
Huayna Picchu is the mountain in all the photos directly connected to MP. Climbing it is not technically difficult but it can be arduous as the air is thin. When I reached the top huffing and puffing, I was shocked to find an ancient Incan laughing at me. At the top is a fort! After doing the climb yourself your appreciation of the work and engineering that went into building at the top of a mountain is increased immeasurably. Also the ruins at the top are dangerous! No guard rails, guides, or people telling you where to go or what to do. Very cool – see picture to the right – off the equilibrium path and you are a goner.
Putucusi is more difficult to climb, there are long sections where you are climbing nearly vertical ladders but reaching the top is worth it.