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6 views50 pages

(Ebook) Recursive Models of Dynamic Linear Economies by Lars Peter Hansen, Thomas J. Sargent ISBN 9780691042770, 0691042772 Download PDF

The document is an overview of the ebook 'Recursive Models of Dynamic Linear Economies' by Lars Peter Hansen and Thomas J. Sargent, which discusses mathematical models in economics. It includes various sections on theory, econometrics, and components of economies, along with references to other related ebooks. The publication is part of The Gorman Lectures in Economics series and is published by Princeton University Press.

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Recursive Models of Dynamic
Linear Economies
The Gorman Lectures in Economics
Richard Blundell, Series Editor

Lawlessness and Economics: Alternative Modes of


Governance,
Avinash K. Dixit

Rational Decisions,
Ken Binmore

Forward-Looking Decision Making:


Dynamic-Programming Models Applied to Health,
Risk, Employment, and Financial Stability,
Robert E. Hall

Recursive Models of Dynamic Linear Economies,


Lars Peter Hansen and Thomas J. Sargent

A series statement appears at the back of the book


Recursive Models of Dynamic
Linear Economies

Lars Peter Hansen

Thomas J. Sargent

Princeton University Press • Princeton and Oxford


c 2014 by Princeton University Press
Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540
In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire,
OX20 1TW
press.princeton.edu

Jacket Art: Camille Pissarro (1830-1903). Rue de l’Épicerie, Rouen. 1898. Oil on canvas,
32 x 25 5/8 in. (81.3 x 65.1 cm). Purchase, Mr. and Mrs. Richard J. Bernhard Gift, 1960 (60.5).
The Metropolitan Museum of Art, New York, NY, USA.
Image copyright  c The Metropolitan Museum of Art. Image Source: Art Resource, NY.

All Rights Reserved

Library of Congress Cataloging-in-Publication Data

Hansen, Lars Peter, 1952-


Recursive models of dynamic linear economies / Lars Peter Hansen and Thomas J. Sargent.
pages cm. – (The Gorman lectures in economics)
Includes bibliographical references and index.
ISBN 978-0-691-04277-0 (hardcover: alk. paper)
1. Economics–Mathematical models. I. Sargent, Thomas J. II. Title.
HB135.H36 2013?
330.01’511352–dc23

2013016059

British Library Cataloging-in-Publication Data is available

The publisher would like to acknowledge the authors of this volume for providing the camera-
ready copy from which this book was printed.

This book has been composed in TEX

Printed on acid-free paper ∞

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1
To a project at the University of Minnesota
that in the 1970s used economic theory
to restrict stochastic processes
and inform econometrics
Contents

Preface xiii

Acknowledgments xv

Part I: Overview

1. Theory and Econometrics 3


1.1. Introduction. 1.2. A Class of Economies. 1.3. Computer Programs.
1.4. Organization. 1.5. Recurring Mathematical Ideas.

Part II: Tools

2. Linear Stochastic Difference Equations 15


2.1. Introduction. 2.2. Notation and Basic Assumptions. 2.3. Predic-
tion Theory. 2.4. Transforming Variables to Uncouple Dynamics. 2.4.1.
Deterministic Seasonals. 2.4.2. Indeterministic Seasonals. 2.4.3. Uni-
variate Autoregressive Processes. 2.4.4. Vector Autoregressions. 2.4.5.
Polynomial Time Trends. 2.4.6. Martingales with Drift. 2.4.7. Covari-
ance Stationary Processes. 2.4.8. Multivariate ARMA Processes. 2.4.9.
Prediction of a Univariate First-Order ARMA. 2.4.10. Growth. 2.4.11.
A Rational Expectations Model. 2.4.12. Method of Undetermined Co-
efficients. 2.5. Concluding Remarks.

– vii –
viii Contents

3. Efficient Computations 33
3.1. Introduction. 3.2. The Optimal Linear Regulator Problem. 3.3.
Transformations to Eliminate Discounting and Cross-Products. 3.4. Sta-
bility Conditions. 3.5. Invariant Subspace Methods. 3.5.1. P x as La-
grange Multiplier. 3.5.2. Invariant Subspace Methods. 3.6. Doubling
Algorithm. 3.7. Partitioning the State Vector. 3.8. Periodic Optimal
Linear Regulator. 3.9. A Periodic Doubling Algorithm. 3.9.1. Parti-
tioning the State Vector. 3.10. Linear Exponential Quadratic Gaussian
Control. 3.10.1. Doubling Algorithm for a Risk-Sensitive Problem. A.
Concepts of Linear Control Theory. B. Symplectic Matrices. C. Alter-
native Forms of the Riccati Equation.

Part III: Components of Economies

4. Economic Environments 61
4.1. Information. 4.2. Taste and Technology Shocks. 4.3. Production
Technologies. 4.4. Examples of Production Technologies. 4.4.1. Other
Technologies. 4.5. Household Technologies. 4.6. Examples of Household
Technologies. 4.7. Square Summability. 4.8. Summary.

5. Optimal Resource Allocations 79


5.1. Planning Problem. 5.2. Lagrange Multipliers. 5.3. Dynamic Pro-
gramming. 5.4. Lagrange Multipliers as Gradients of Value Function.
5.5. Planning Problem as Linear Regulator. 5.6. Allocations for Five
Economies. 5.6.1. Brock-Mirman (1972) or Hall (1978) Model. 5.6.2.
A Growth Economy Fueled by Habit Persistence. 5.6.3. Lucas’s Pure
Exchange Economy. 5.6.4. An Economy with a Durable Consumption
Good. 5.6.5. Computed Examples. 5.7. Hall’s Model. 5.8. Higher Ad-
justment Costs. 5.9. Altered Growth Condition. 5.10. A Jones-Manuelli
(1990) Economy. 5.11. Durable Consumption Goods. 5.12. Summary.
A. Synthesizing a Linear Regulator. B. A Brock-Mirman (1972) or Hall
(1978) Model. 5.B.1. Uncertainty. 5.B.2. Optimal Stationary States.
Contents ix

6. A Commodity Space 125


6.1. Valuation. 6.2. Price Systems as Linear Functionals. 6.3. A One-
Period Model under Certainty. 6.4. One Period under Uncertainty. 6.5.
An Infinite Number of Periods and Uncertainty. 6.5.1. Conditioning In-
formation. 6.6. Lagrange Multipliers. 6.7. Summary. A. Mathematical
Details.

7. Competitive Economies 131


7.1. Introduction. 7.2. Households. 7.3. Type I Firms. 7.4. Type II
Firms. 7.5. Competitive Equilibrium. 7.6. Lagrangians. 7.6.1. House-
hold Lagrangian. 7.6.2. Type I Firm Lagrangian. 7.6.3. Type II Firm
Lagrangian. 7.7. Equilibrium Price System. 7.8. Asset Pricing. 7.9.
Term Structure of Interest Rates. 7.10. Reopening Markets. 7.11. Non-
Gaussian Asset Prices. 7.12. Asset Pricing Example.

Part IV: Representations and Properties

8. Statistical Representations 153


8.1. The Kalman Filter. 8.2. Innovations Representation. 8.3. Con-
vergence. 8.3.1. Computation of Time-Invariant Kalman Filter. 8.4.
Factorization of Likelihood Function. 8.4.1. Initialization Assumptions.
8.4.2. Possible Nonexistence of Stationary Distribution. 8.5. Spectral
Factorization Identity. 8.6. Wold and Autoregressive Representations.
8.7. Frequency Domain Estimation. 8.8. Approximation Theory. 8.9.
Aggregation over Time. 8.10. Simulation Estimators. A. Initialization
of Kalman Filter. B. Zeros of Characteristic Polynomial. C. Serially
Correlated Measurement Errors. D. Innovations in yt+1 as Functions of
wt+1 and ηt+1 . E. Innovations in a Permanent Income Model.

9. Canonical Household Technologies 191


9.1. Introduction. 9.2. Definition of a Canonical Household Technol-
ogy. 9.3. Dynamic Demand Functions. 9.3.1. Wealth and the Multi-
plier μw
0 . 9.3.2. Dynamic Demand System. 9.3.3. Gorman Aggregation
and Engel Curves. 9.3.4. Reopened Markets. 9.4. Computing Canon-
ical Representations. 9.4.1. Basic Idea. 9.4.2. An Auxiliary Problem
Induces a Canonical Representation. 9.5. An Operator Identity. 9.6.
x Contents

Becker-Murphy Model of Rational Addiction. A. Fourier Transforms.


9.A.1. Primer on z -Transforms. 9.A.2. Time Reversal and Parseval’s
Formula. 9.A.3. One-Sided Sequences. 9.A.4. Useful Properties. 9.A.5.
One-Sided Transforms. 9.A.6. Discounting. 9.A.7. Fourier Transforms.
9.A.8. Verifying Equivalent Valuations. 9.A.9. Equivalent Representa-
tions of Preferences. 9.A.10. First Term: Factorization Identity. 9.A.11.
Second Term. 9.A.12. Third Term.

10. Examples 217


10.1. Partial Equilibrium. 10.2. The Setup. 10.3. Equilibrium Invest-
ment under Uncertainty. 10.4. A Housing Model. 10.4.1. Demand.
10.4.2. House Producers. 10.5. Cattle Cycles. 10.5.1. Mapping Cat-
tle Farms into Our Framework. 10.5.2. Preferences. 10.5.3. Technol-
ogy. 10.6. Models of Occupational Choice and Pay. 10.6.1. A One-
Occupation Model. 10.6.2. Skilled and Unskilled Workers. A. Decen-
tralizing the Household.

11. Permanent Income Models 233


11.1. Technology. 11.2. Two Implications. 11.3. Allocation Rules.
11.4. Deterministic Steady States. 11.5. Cointegration. 11.6. Con-
stant Marginal Utility of Income. 11.7. Consumption Externalities. A.
Exotic Tax Smoothing Models.

12. Gorman Heterogeneous Households 253


12.1. Introduction. 12.2. Gorman Aggregation (Static). 12.3. An Econ-
omy with Heterogeneous Consumers. 12.4. Allocations. 12.4.1. Con-
sumption Sharing Rules. 12.5. Risk Sharing. 12.6. Implementing the
Allocation Rule with Limited Markets. A. Computer Example.

13. Complete Markets Aggregation 269


13.1. Introduction. 13.2. Preferences and Household Technologies.
13.2.1. Production Technology. 13.3. A Pareto Problem. 13.4. Com-
petitive Equilibrium. 13.4.1. Households. 13.4.2. Firms of Types I and
II. 13.5. Computation of Equilibrium. 13.5.1. Candidate Equilibrium
Prices. 13.5.2. A Negishi Algorithm. 13.6. Complete Markets Aggrega-
tion. 13.6.1. Static Demand. 13.6.2. Frequency Domain Representation
of Preferences. 13.7. A Programming Problem for Complete Markets
Aggregation. 13.7.1. Factoring S  S . 13.8. Summary of Findings. 13.9.
Contents xi

The Aggregate Preference Shock Process. 13.9.1. Interpretation of ŝt


Component. 13.10. Initial Conditions.

14. Periodic Models of Seasonality 291


14.1. Three Models of Seasonality. 14.2. A Periodic Economy. 14.3. As-
set Pricing. 14.4. Prediction Theory. 14.5. Term Structure of Interest
Rates. 14.6. Conditional Covariograms. 14.7. A Stacked and Skip-
Sampled System. 14.8. Covariances of the Stacked and Skip-Sampled
Process. 14.9. Tiao-Grupe Formula. 14.9.1. State-Space Realization of
Tiao-Grupe Formula. 14.10. Periodic Hall Model. 14.11. Periodic Inno-
vations Representations for a Periodic Model. A. Disguised Periodicity.

A. MATLAB Programs 327

References 379

Subject Index 393

Author Index 397

MATLAB Index 399


Preface

In 1992, Carolyn Sargent said, “You are writing the second edition of your book
before you have published the first.” Her assertion was correct. We wrote 90
percent of this book between 1988 and 1994, but completed it only in 2012.
Richard Blundell’s invitation to deliver the Gorman Lectures at University Col-
lege London convinced us to abandon our earlier intentions to publish this book
only after we had implemented the many improvements that we know are still
possible.
James Tobin said that macroeconomics, or what he also liked to call aggre-
gate economics, is a subject that ignores distribution effects. Tobin referred to
theories of prices, interest rates, and aggregate quantities that are self-contained
in the sense that they restrict aggregate quantities without needing also to de-
termine distributions of quantities across people. The great economist Sherwin
Rosen said that “the whole damn subject of economics is macroeconomics.” His
quip aptly describes Sherwin’s models of markets for cattle, houses, and workers,
all of which are cast in terms of demand and supply functions best thought of
as describing behaviors of representative agents. Big parts of macroeconomics,
but not all, continue to ignore distribution effects in the analytical tradition of
Tobin and Rosen. (See Ljungqvist and Sargent (2012) for an introduction to
macroeconomic models in which heterogeneity across consumers and firms plays
a big part.)
Though some of our leading examples are about microeconomic topics, this
book is mostly about macroeconomics in the sense of Tobin and Rosen, the
models being cast in terms of a representative consumer. Such models are use-
ful but restrictive. More general structures with heterogeneous consumers do
not possess a representative household of the type that this book extensively
uses to facilitate analysis of aggregate quantities and prices. This book demon-
strates the analytical benefits acquired when an aggregate analysis is possible,
but characterizes how restrictive are the assumptions under which there exists
the representative household that justifies a purely aggregative analysis.

– xiii –
xiv Preface

Thus, for us, among the most interesting parts of this book are two chapters
about different ways of aggregating heterogeneous households’ preferences into
a representative household and the senses in which they do or don’t justify an
aggregative economic analysis. These chapters extend ideas of W. M. Gorman
to a dynamic setting. We intend to honor W. M. Gorman by thinking hard
about his ideas.
Acknowledgments

For helpful discussions and research assistance, we thank Evan Anderson,


Saki Bigio, Ross Doppelt, Casey Mulligan, Martin Schneider, Thomas Tallarini,
François Velde, Neng Wang, Pierre-Olivier Weill, and Chi Wa Yuen. We thank
Bilal Kamal for excellent help in proofreading and criticizing the manuscript.
We thank François Velde for writing TEX macros that we used to typeset this
book. We thank Richard Blundell for insightful comments and corrections.
MATLAB  R and Simulink  R are registered trademarks of The MathWorks

Inc. and are used with permission. The MathWorks does not warrant the ac-
curacy of the text or exercises in this book. This book’s use or discussion of
MATLAB  R , Simulink 
R , or related products does not constitute an endorse-

ment or sponsorship by The MathWorks of a particular pedagogical approach


or particular use of the MATLAB  R and Simulink  R software.

– xv –
Part I
Overview
Chapter 1
Theory and Econometrics
Complete market economies are all alike . . ..
— Robert E. Lucas, Jr. (1989)

1.1. Introduction
Economic theory identifies patterns that unite apparently diverse subjects. Con-
sider the following models:

1. Ryoo and Rosen’s (2004) partial equilibrium model of the market for engi-
neers;
2. Rosen, Murphy, and Scheinkman’s (1994) model of cattle cycles;
3. Lucas’s (1978) model of asset prices;
4. Brock and Mirman’s (1972) and Hall’s (1978) model of the permanent in-
come theory of consumption;
5. Time-to-build models of business cycles;
6. Siow’s (1984) model of occupational choice;
7. Topel and Rosen’s (1988) model of the dynamics of house prices and quan-
tities;
8. Theories of dynamic demand curves;
9. Theories of dynamic supply curves;
10. Lucas and Prescott’s (1971) model of investment under uncertainty.

These models and many more have identical structures because all describe
competitive equilibria with complete markets. This is the meaning of words of
Robert E. Lucas, Jr., with which we have chosen to begin this chapter. Lucas
refers to the fact that complete markets models are cast in terms of a common
set of objects and a common set of assumptions about how those objects fit
together, namely: 1

1. Descriptions of flows of information over time, of endowments of resources,


and of commodities that can be traded
1 Unity goes only so far. The words composing the ellipsis in Lucas’s sentence are “but
each incomplete market economy is incomplete in its own individual way.”

–3–
Other documents randomly have
different content
That was a sweet summer night. The moon was not yet risen,
the stars were in the sky, not many, for the heaven was not dark,
but suffused with lost sunlight. To the east lay the range of
Dartmoor mountains, rugged and grey; to the west, peaked and
black against silver, the Cornish tors. But all these heights on this
night were scintillating with golden moving spots of fire. The time
had come for what is locally called ‘swaling,’ that is, firing the
whinbrakes. In places half a hill side was flaked with red flame, then
it flared yellow, then died away. Clouds of smoke, tinged with fire
reflection from below, rolled away before the wind. When the
conflagration reached a dense and tall tree-like mass of gorse the
flame rose in a column, or wavered like a golden tongue. Then,
when the material was exhausted and no contiguous brake
continued the fire, the conflagration ended, and left only a patch of
dull glowing scarlet ember.
Barbara leaned against the last stone hedge which divided moor
from field, and looked at the moving lights without thinking of the
beauty and wildness of the spectacle. She was steeped in her own
thoughts, and was never at any time keenly alive to the beautiful
and the fantastic.
She thought of Jasper. She had lost all faith in him. He was false
and deceitful. What could she believe about that meeting on the
Raven Rock? He might have convinced her father that he was not
there. He could not convince her. What was to be done? Would her
father betray the man? He was ill now and could do nothing. Why
was Jasper so obstinate as to refuse to leave? Why? Because he was
infatuated with Eve.
On that very down it was that Jasper had been thrown and
nearly killed. If only he had been killed outright. Why had she
nursed him so carefully? Far better to have left him on the moor to
die. How dare he aspire to Eve? The touch of his hand carried a
taint. Her brain was dark, yet, like that landscape, full of wandering
sparks of fire. She could not think clearly. She could not feel
composedly. Those moving, wavering fires, now rushing up in
sheaves of flame, now falling into a sullen glow burnt on the sides of
solid mountains, but her fiery thoughts, that sent a blaze into her
cheek and eye, and then died into a slow heat, moved over tossing
billows of emotion. She put her hand to her head as if by grasping it
she could bring her thoughts to a standstill; she pressed her hands
against her bosom, as if by so doing she could fix her emotions. The
stars in the serene sky burned steadily, ever of one brightness.
Below, these wandering fires flared, glowed, and went out. Was it
not a picture of the contrast between life on earth and life in the
settled celestial habitations? Barbara was not a girl with much fancy,
but some such a thought came into her mind, and might have taken
form had not she at the moment seen a dark figure issue from the
lane.
‘Who goes there?’ she called imperiously.
The figure stopped, and after a moment answered: ‘Oh, Miss!
you have a-given me a turn. It be me, Jane.’
‘And pray,’ said Barbara, ‘what brings you here at night? Whither
are you going?’
The girl hesitated, and groped in her mind for an excuse. Then
she said: ‘I want, miss, to go to Tavistock.’
‘To Tavistock! It is too late. Go home to bed.’
‘I must go, Miss Barbara. I’m sure I don’t want to. I’m scared of
my life, but the master have sent me, and what can I do? He’ve a-
told me to go to Joseph Woodman.’
‘It is impossible, at this time. It must not be.’
‘But, Miss, I promised I’d go, and sure enough I don’t half like it,
over those downs at night, and nobody knows what one may meet. I
wouldn’t be caught by the Whish Hounds and Black Copplestone, not
for’—the girl’s imagination was limited, so she concluded, ‘well, Miss,
not for nothing.’
Barbara considered a moment, and then said, ‘I have no fear. I
will accompany you over the Down, till you come to habitations. I
am not afraid of returning alone.’
‘Thank you, Miss Barbara, you be wonderfully good.’
The girl was, indeed, very grateful for her company. She had had
her nerves sorely shaken by the encounter with Watt, and now in
the fulness of her thankfulness she confided to her mistress all that
Mr. Jordan had said, concluding with her opinion that probably ‘It
was naught but a fancy of the Squire; he do have fancies at times.
Howsomever, us must humour ‘m.’
Jasper also had gone forth. In his breast also was trouble, and a
sharp pain, that had come with a spasm when Barbara told him how
she hated him.
But Jasper did not go to Morwell Down. He went towards the
Raven Rock that lay on the farther side of the house. He also desired
to be alone and under the calm sky. He was stifled by the air of a
house, depressed by the ceiling.
The words of Barbara had wounded him rather than stung him.
She had not only told him that she hated him, but had given the
best proof of her sincerity by betraying him. Suspecting him of
carrying on an unworthy intrigue with Eve, she had sacrificed him to
save her sister. He could not blame her, her first duty was towards
Eve. One comfort he had that, though Barbara had betrayed him,
she did not seek his punishment, she sought only his banishment
from Morwell.
Once—just once—he had half opened her heart, looked in, and
fancied he had discovered a tender regard for him lurking in its
bottom. Since then Barbara had sought every opportunity of
disabusing his mind of such an idea. And now, this night, she had
poured out her heart at his feet, and shown him hatred, not love.
Jasper’s life had been one of self-denial. There had been little joy
in it. Anxieties had beset him from early childhood; solicitude for his
brother, care not to offend his father. By nature he had a very loving
heart, but he had grown up with none to love save his brother, who
had cruelly abused his love. A joyous manhood never ensues on a
joyless boyhood. Jasper was always sensible of an inner sadness,
even when he was happy. His brightest joys were painted on a
sombre background, but then, how much brighter they seemed by
the contrast—alas, only, that they were so few! The circumstances of
his rearing had driven him in upon himself, so that he lived an inner
life, which he shared with no one, and which was unperceived by all.
Now, as he stood on the Rock, with an ache at his heart, Jasper
uncovered his head, and looked into the softly lighted vault, set with
a few faint stars. As he stood thus with his hands folded over his
hat, and looked westward at the clear, cold, silvery sky behind and
over the Cornish moors, an unutterable yearning strained his heart.
He said no word, he thought no thought. He simply stood uncovered
under the summer night sky, and from his heart his pain exhaled.
Did he surmise that at that same time Barbara was standing on
the moor, also looking away beyond the horizon, also suffering,
yearning, without knowing for what she longed? No, he had no
thought of that.
And as both thus stood far removed in body, but one in sincerity,
suffering, fidelity, there shot athwart the vault of heaven a brilliant
dazzling star.
Mr. Coyshe at his window, smoking, said: ‘By Ginger! a meteor!’
But was it not an angel bearing the dazzling chalice of the
sangreal from highest heaven, from the region of the still stars,
down to this world of flickering, fading, wandering fires, to minister
therewith balm to two distressed spirits?
CHAPTER XXXIII.

THE OWLS.

Barbara had been interrupted in her meditations, so was Jasper. As


he stood lost in a painful dream, but with a dew from heaven falling
on his parched soul, suddenly he was startled out of his abstraction
by a laugh and an exclamation at his elbow.
‘Well, Jasper, composing verses to the weak-eyed Leah or the
blue-orbed Rachel?’
‘What brings you here, Watt?’ asked Jasper, disguising his
annoyance.
‘Or, my sanctimonious fox, are you waiting here for one of the
silly geese to run to you?’
‘You have come here bent on mischief,’ said Jasper, disdaining to
notice his jokes.
The evening, the still scene, the solitary platform raised so high
above the land beyond, had seemed holy, soothing as a church, and
now, at once, with the sound of Walter’s voice, the feeling was gone,
all seemed desecrated.
‘Watt,’ said Jasper, sternly, ‘you sent me away to Buckfastleigh by
a lie. Why did you do that? It is utterly false that my father is ill and
dying.’
‘Is it so? Then I dreamed it, Jasper. Morning dreams come true,
folks say. There, my brother, you are a good, forgiving fellow. You
will pardon me. The fact is that Martin and I wanted to know how
matters went at home. I did not care to go myself, Martin could not
go, so—I sent you, my good simpleton.’
‘You told me a lie.’
‘If I had told you the truth you would not have gone. What was
that we were taught at school? “Magna est veritas, et prævalebit.” I
don’t believe it; experience tells me the contrary. Long live lies; they
win the day all the world over.’
‘What brings you here?’
‘Have I not told you? I desired to see you and to have news of
my father. You have been quick about it, Jasper. I could scarce
believe my eyes when I saw you riding home.’
‘You have been watching?’
‘Of course I have. My eyes are keen. Nothing escapes them.’
‘Walter, this will not do. I am not deceived; you did not come
here for the purpose you say. You want something else, what is it?’
The boy laughed, snapped his fingers, and began to dance,
whistling a tune, on the rock; approaching, then backing from
Jasper.
‘Oh, you clever old Jasper!’ he laughed, ‘now you begin to see—
like the puppy pitched into the water-butt, who opened his eyes
when too late.’
Jasper folded his arms. He said nothing, but waited till the boy’s
mad pranks came to an end. At last Watt, seeing that he could not
provoke his brother, desisted, and came to him with affected
humility.
‘There, Jasper—Saint Jasper, I mean—I will be quiet and go
through my catechism.’
‘Then tell me why you are here.’
‘Well, now, you shall hear our scheme. Martin and I thought that
you had better patch up your little quarrel with father, and then we
knew we should have a good friend at his ear to prompt forgiveness,
and so, perhaps, as his conscience stirred, his purse-strings might
relax, and you would be able to send us a trifle in money. Is not this
reasonable?’
Yes, there could be no denying it, this was reasonable and
consistent with the characters of the two, who would value their
father’s favour only by what it would profit them. Nevertheless
Jasper was unsatisfied. Watt was so false, so unscrupulous, that his
word never could be trusted.
Jasper considered for a few minutes, then he asked, ‘Where is
Martin—is he here?’
‘Here!’ jeered the boy, ‘Martin here, indeed! not he. He is in safe
quarters. Where he is I will blab to no one, not even to you. He
sends me out from his ark of refuge as the dove, or rather as the
raven, to bring him news of the world from which he is secluded.’
‘Walter, answer me this. Who met Miss Eve this evening on this
very rock? Answer me truly. More depends on this than you are
aware of.’
‘Miss Eve! What do you mean? My sister who is dead and gone? I
do not relish the company of ghosts.’
‘You know whom I mean. This is miserable evasion. I mean the
younger of the daughters of Mr. Jordan. She was here at sundown
this evening and someone was with her. I conjure you by all that you
hold sacred——’
‘I hold nothing sacred,’ said the boy.
‘I conjure you most solemnly to tell me the whole truth, as
brother to brother.’
‘Well, then—as brother to brother—I did.’
‘For what purpose, Watt?’
‘My dear Jasper, can we live on air? Here am I hopping about the
woods, roosting in the branches, and there is poor Martin mewed up
in his ark. I must find food for him and myself. You know that I have
made the acquaintance of the young lady who, oddly enough, bears
the name of our dear departed mother and sister. I have appealed to
her compassion, and held out my hat for money. I offered to dance
on my head, to turn a wheel all round the edge of this cliff, in
jeopardy of my life for half a guinea, and she gave me the money to
prevent me from risking broken bones.’
‘Oh, Watt, you should not have done this!’
‘We must live. We must have money.’
‘But, Watt, where is all that which was taken from my pocket?’
‘Gone,’ answered the boy. ‘Gone as the snow before south-west
wind. Nothing melts like money, not even snow, no, nor butter, no,
nor a girl’s heart.’ Then with a sly laugh, ‘Jasper, where does old
addle-brains keep his strong box?’
‘Walter!’ exclaimed Jasper, indignantly.
‘Ah!’ laughed the boy, ‘if I knew where it was I would creep to it
by a mouse hole, and put my little finger into the lock, and when I
turned that, open flies the box.’
‘Walter, forbear. You are a wicked boy.’
‘I confess it. I glory in it. Father always said I was predestined to
——’
‘Be silent,’ ordered Jasper, angrily; ‘you are insufferable.’
‘There, do not ruffle your feathers over a joke. Have you some
money to give me now?’
‘Watt,’ said Jasper, very sternly, ‘answer me frankly, if you can. I
warn you.’ He laid his hand on the boy’s arm. ‘A great deal depends
on your giving me a truthful answer. Is Martin anywhere hereabouts?
I fear he is, in spite of your assurances, for where you are he is not
often far away. The jackal and the lion hunt together.’
‘He is not here. Good-bye, old brother Grave-airs.’ Then he ran
away, but before he had gone far turned and hooted like an owl, and
ran on, and was lost in the gloom of the woods, but still as he ran
hooted at intervals, and owls answered his cry from the rocks, and
flitted ghost-like about in the dusk, seeking their brother who called
them and mocked at them.
Now that he was again alone, Jasper in vain sought to rally his
thoughts and recover his former frame of mind. But that was not
possible. Accordingly he turned homewards.
He was very tired. He had had two long days’ ride, and had slept
little if at all the previous night. Though recovered after his accident
he was not perfectly vigorous, and the two hard days and broken
rest had greatly tired him. On reaching Morwell he did not take a
light, but cast himself, in his clothes, on his bed, and fell into a
heavy sleep.
Barbara walked quietly back after having parted with Jane. She
hoped that Jasper had on second thoughts taken the prudent course
of escaping. It was inconceivable that he should remain and allow
himself to be retaken. She was puzzled how to explain his conduct.
Then all at once she remembered that she had left the convict suit in
her father’s room; she had forgotten to remove it. She quickened
her pace and arrived breathless at Morwell.
She entered her father’s apartment on tiptoe. She stood still and
listened. A night-light burned on the floor, and the enclosing iron
pierced with round holes cast circles of light about the walls. The
candle was a rushlight of feeble illuminating power.
Barbara could see her father lying, apparently asleep, in bed,
with his pale thin hands out, hanging down, clasped, as if in prayer;
one of the spots of light danced over the finger tips and nails. She
heard him breathe, as in sleep.
Then she stepped across the room to where she had cast the suit
of clothes. They lay in a grey heap, with the spots of light avoiding
them, dancing above them, but not falling on them.
Barbara stooped to pick them up.
‘Stay, Barbara,’ said her father. ‘I hear you. I see what you are
doing. I know your purpose. Leave those things where they lie.’
‘O papa! dear papa, suffer me to put them away.’
‘Let them lie there, where I can see them.’
‘But, papa, what will the maids think when they come in? Besides
it is untidy to let them litter about the floor.’
He made an impatient gesture with his hand.
‘May I not, at least, fold them and lay them on the chair?’
‘You may not touch them at all,’ he said in a tone of irritation.
She knew his temper too well to oppose him further.
‘Good night, dear papa. I suppose Eve is gone to bed?’
‘Yes; go also.’
She was obliged, most reluctantly, to leave the room. She
ascended the stairs, and entered her own sleeping apartment. From
this a door communicated with that of her sister. She opened this
door and with her light entered and crossed it.
Eve had gone to bed, and thrown all her clothes about on the
floor. Barbara had some difficulty in picking her way among the
scattered articles. When she came to the bedside, she stood, and
held her candle aloft, and let the light fall over the sleeping girl.
How lovely she was, with her golden hair in confusion on the
pillow! She was lying with her cheek on one rosy palm, and the
other hand was out of bed, on the white sheet—and see! upon the
finger, Barbara recognised the turquoise ring. Eve did not venture to
wear this by day. At night, in her room, she had thrust the golden
hoop over her finger, and had gone to sleep without removing it.
Barbara stooped, and kissed her sister’s cheek. Eve did not
awake, but smiled in slumber; a dimple formed at the corner of her
mouth.
Then Barbara went to her own room, opened her desk, and the
secret drawer, and looked at the bunch of dry roses. They were very
yellow now, utterly withered and worthless. The girl took them,
stooped her face to them—was it to discover if any scent lingered in
the faded leaves? Then she closed the drawer and desk again, with
a sigh.
Was Barbara insensible to what is beautiful, inappreciative of the
poetry of life? Surely not. She had been forced by circumstances to
be practical, to devote her whole thought to the duties of the house
and estate; she had said to herself that she had no leisure to think
of those things that make life graceful; but through her strong,
direct, and genuine nature ran a ‘Leitmotif’ of sweet, pure melody,
kept under and obscured by the jar and jangle of domestic cares and
worries, but never lost. There is no nature, however vulgar, that is
deficient in its musical phrase, not always quite original and unique,
and only the careless listener marks it not. The patient, attentive ear
suspects its presence first, listens for it, recognises it, and at last
appreciates it.
In poor faithful Barbara now the sweet melody, somewhat sad,
was rising, becoming articulate, asserting itself above all other
sounds and adventitious strains—but, alas! there was no ear to listen
to it.
Barbara went to her window and opened it.
‘How the owls are hooting to-night!’ she said. ‘They, like myself,
are full of unrest. To-whit! To-whoo!’
CHAPTER XXXIV.

THE DOVES.

Barbara had no thought of going to bed. She could not have slept
had she gone. There was a clock in the tower, a noisy clock that
made its pulsations heard through the quadrangle, and this clock
struck twelve. By this time Jane had roused the young policeman,
and he was collecting men to assist him in the capture. Perhaps they
were already on their way,—or were they waiting for the arrival of
warders from Prince’s Town? Those warders were more dangerous
men than the constables, for they were armed with short guns, and
prepared to fire should their game attempt to break away.
She looked across the court at Jasper’s window. No light was in
it. Was he there, asleep? or had he taken her advice and gone? She
could not endure the thought of his capture, the self-reproach of
having betrayed him was more than she could bear. Barbara, usually
so collected and cool, was now nervous and hot.
More light was in the sky than had been when she was on the
down. The moon was rising over the roof. She could not see it, but
she saw the reflection in Jasper’s window, like flakes of silver.
What should she do? Her distress became insupportable, and she
felt she must be doing something to relieve her mind. The only thing
open to her was to make another attempt to recover the prison suit.
If she could destroy that, it would be putting out of the way one
piece of evidence against him—a poor piece, still a piece. She was
not sure that it would avail him anything, but it was worth risking
her father’s anger on the chance.
She descended the stairs once more to her father’s room. The
door was ajar, with a feeble yellow streak issuing from it. She looked
in cautiously. Then with the tread of a thief she entered and passed
through a maze of quivering bezants of dull light. She stooped, but,
as she touched the garments, heard her father’s voice, and started
upright. He was speaking in his sleep—’De profundis clamavi ad te;’
then he tossed and moaned, and put up his hand and held it shaking
in the air. ‘Si iniquitates’—he seemed troubled in his sleep, unable to
catch the sequence of words, and repeated ‘Si iniquitates
observaveris,’ and lay still on his pillow again; whilst Barbara stood
watching him, with her finger to her lip, afraid to move, afraid of the
consequences, should he wake and see her in her disobedience.
Then he mumbled, and she heard him pulling at his sheet. ‘Out
of love, out of the deeps of love, I have sinned.’ Then suddenly he
cried out, ‘Si iniquitates observaveris, Domine, quis sustinebit?’—he
had the sentence complete, or nearly so, and it appeased him.
Barbara heard him sigh, she stole to his side, bowed over his ear,
and said, ‘Apud te propitiatio est: speravit anima mea in Domino.’
Whether he heard or not she did not know; he breathed thenceforth
evenly in sleep, and the expression of distress left his face.
Then Barbara took up the bundle of clothes and softly withdrew.
She was risking something for Jasper—the loss of her father’s
regard. She had recently drawn nearer to his heart than ever before,
and he had allowed her to cling round his neck and kiss him. Yet
now she deliberately disobeyed him. He would be very angry next
morning.
When she was in the hall she turned over in her mind what was
best to be done with the clothes. She could not hide them in the
house. Her father would insist on their reproduction. They must be
destroyed. She could not burn them: the fire in the kitchen was out.
The only way she could think of getting rid of them was to carry
them to the Raven Rock and throw them over the precipice. This,
accordingly, she did. She left the house, and in the moonlight walked
through the fields and wood to the crag and hurled the bundle over
the edge.
Now that this piece of evidence against Jasper was removed, it
was expedient that he should escape without further delay—if he
were still at Morwell.
Barbara had a little money of her own. When she unlocked her
desk and looked at the withered flowers, she drew from it her purse,
that contained her savings. There were several pounds in it. She
drew the knitted silk purse from her pocket, and, standing in the
moonlight, counted the sovereigns in her hand. She was standing
before the gatehouse near the old trees, hidden by their shadow.
She looked up at Jasper’s other window—that which commanded the
entrance and was turned from the moon. Was he there? How could
she communicate with him, give him the money, and send him off?
Then the grating clock in the tower tolled one. Time was passing,
danger drew on apace. Something must be done. Barbara picked up
some pebbles and threw them at Jasper’s window, but her aim was
bad or her arm shook, and they scattered without touching the
glass.
All at once she heard feet—a trampling in the lane—and she saw
also that lights were burning on the down. The lights were merely
gorse blazes, for Morwell Moor was being ‘swaled,’ and the flames
were creeping on; and the trampling was of young colts and bullocks
that fed on the down, which were escaping before the fires; but to
Barbara’s nervous fear the lights and the tramp betokened the
approach of a body of men to capture Jasper Babb. Then, without
any other thought but to save him, she ran up the stair, struck at his
door, threw it open, and entered. He started from his bed, on which
he had cast himself fully dressed, and from dead weariness had
dropped asleep.
‘For God’s dear sake,’ said Barbara, ‘come away! They are after
you; they are close to the house. Here is money—take it, and go by
the garden.’
She stood in the door, holding it, trembling in all her limbs, and
the door she held rattled.
He came straight towards her.
‘Miss Jordan!’ he exclaimed. ‘Oh, Miss Jordan I shall never forgive
myself. Go down into the garden—I will follow at once. I will speak
to you; I will tell you all.’
‘I do not wish you to speak. I insist on your going.’
He came to her, took her hand from the door, and led her down
the stairs. As they came out into the gateway they heard the tramp
of many feet, and a rush of young cattle debouched from the lane
upon the open space before the gate.
Barbara was not one to cry, but she shivered and shrank before
her eyes told her what a mistake she had made.
‘Here,’ she said, ‘I give you my purse. Go!’
‘No,’ answered Jasper. ‘There is no occasion for me to go. I have
acted wrongly, but I did it for the best. You see, there is no occasion
for fear. These ponies have been frightened by the flames, and have
come through the moor-gate, which has been left open. I must see
that they do not enter the court and do mischief.’
‘Never mind about the cattle, I pray you. Go! Take this money; it
is mine. I freely give it you. Go!’
‘Why are you so anxious about me if you hate me?’ asked Jasper.
‘Surely it would gratify hate to see me handcuffed and carried off!’
‘No, I do not hate you—that is, not so much as to desire that. I
have but one desire concerning you—that we should never see your
face again.’
‘Miss Jordan, I shall not be taken.’
She flared up with rage, disappointment, shame. ‘How dare you!’
she cried. ‘How dare you stand here and set me at naught, when I
have done so much for you—when I have even ventured to rouse
you in the depth of night! My God! you are enough to madden me. I
will not have the shame come on this house of having you taken
here. Yes—I recall my words—I do hate you.’
She wrung her hands; Jasper caught them and held them
between his own.
‘Miss Barbara, I have deceived you. Be calm.’
‘I know only too well that you have deceived me—all of us,’ she
said passionately. ‘Let go my hands.’
‘You misunderstand me. I shall not be taken, for I am not
pursued. I never took your sister’s money. I have never been in jail.’
She plucked her hands away.
‘I do not comprehend.’
‘Nevertheless, what I say is simple. You have supposed me to be
a thief and an escaped convict. I am neither.’
Barbara shook her head impatiently.
‘I have allowed you to think it for reasons of my own. But now
you must be undeceived.’
The young cattle were galloping about in front, kicking, snorting,
trying the hedges. Jasper left Barbara for a while that he might drive
them into a field where they could do no harm. She remained under
the great gate in the shadow, bewildered, hoping that what he now
said was true, yet not daring to believe his words.
Presently he returned to her. He had purposely left her that she
might have time to compose herself. When he returned she was
calm and stern.
‘You cannot blind me with your falsehoods,’ she said. ‘I know that
Mr. Ezekiel Babb was robbed by his own son. I know the prison suit
was yours. You confessed it when I showed it you on your return to
consciousness: perhaps before you were aware how seriously you
committed yourself. I know that you were in jail at Prince’s Town,
and that you escaped.’
‘Well, Miss Jordan, what you say is partly true, and partly
incorrect.’
‘Are you not Mr. Babb’s son?’ she asked imperiously.
He bowed; he was courtly in manner.
‘Was not his son found guilty of robbing him?’
He bowed again.
‘Was he not imprisoned for so doing?’
‘He was so.’
‘Did he not escape from prison?’
‘He did.’
‘And yet,’ exclaimed Barbara angrily, ‘you dare to say with one
breath that you are innocent, whilst with the next you confess your
guilt! Like the satyr in the fable, I would drive you from my
presence, you blower of true and false!’
He caught her hands again and held her firmly, whilst he drew
her out of the shadow of the archway into the moonlight of the
court.
‘Do you give it up?’ he asked; and, by the moon, the sickle moon,
on his pale face, she saw him smile. By that same moon he saw the
frown on her brow. ‘Miss Barbara, I am not Ezekiel Babb’s only son!’
Her heart stood still; then the blood rushed through her veins like
the tidal bore in the Severn. The whole of the sky seemed full of
daylight. She saw all now clearly. Her pride, her anger fell from her
as the chains fell from Peter when the angel touched him.
‘No, Miss Jordan, I am guiltless in this matter—guiltless in
everything except in having deceived you.’
‘God forgive you!’ she said in a low tone as her eyes fell and
tears rushed to them. She did not draw her hands from his. She was
too much dazed to know that he held them. ‘God forgive you!—you
have made me suffer very much!’
She did not see how his large earnest eyes were fixed upon her,
how he was struggling with his own heart to refrain from speaking
out what he felt; but had she met his eye then in the moonlight,
there would have been no need of words, only a quiver of the lips,
and they would have been clasped in each other’s arms.
She did not look up; she was studying, through a veil of tears,
some white stones that caught the moonlight.
‘This is not the time for me to tell you the whole sad tale,’ he
went on. ‘I have acted as I thought my duty pointed out—my duty to
a brother.’
‘Yes,’ said Barbara, ‘you have a brother—that strange boy.’
A laugh, jeering and shrill, close in their ears. From behind the
great yew appeared the shoulders and face of the impish Walter.
‘Oh, the pious, the proper Jasper! Oh, ho, ho! What frail men
these saints are who read their Bibles to weak-eyed Leahs and
blooming Rachels, and make love to both!
He pointed jeeringly at them with his long fingers.
‘I set the down on fire for a little fun. I drove the ponies along
this lane; and see, I have disturbed a pair of ring-doves as well. I
won’t hoot any more; but—coo! coo! coo!’ He ran away, but stopped
every now and then and sent back to them his insulting imitations of
the call of wood-pigeons—’Coo! coo! coo!’
CHAPTER XXXV.

THE ALARM BELL.

Next morning Barbara entered the hall after having seen about the
duties of the house, ordered dinner, weighed out spices and groats,
made the under-servant do the work of Jane, who was absent; she
moved about her usual duties with her usual precision and order, but
without her usual composure.
When she came into the hall on her way to her father’s room,
she found Eve there engaged and hard at work on some engrossing
occupation.
‘Oh, Bab! do come and see how bright and beautiful I am making
this,’ said the girl in overflowing spirits and pride. ‘I found it in the
chest in the garret, and I am furbishing it up.’ She held out a sort of
necklace or oriental carcanet, composed of chains of gold beads and
bezants. ‘It was so dull when I found it, and now it shines like pure
gold!’ Her innocent, childish face was illumined with delight. ‘I am
become really industrious.’
‘Yes, dear; hard at work doing nothing.’
‘I should like to wear this,’ she sighed.
That she had deceived her sister, that she had given her occasion
to be anxious about her, had quite passed from her mind, occupied
only with glittering toys.
Barbara hesitated at her father’s door. She knew that a painful
scene awaited her. He was certain to be angry and reproach her for
having disobeyed him. But her heart was relieved. She believed in
the innocence of Jasper. Strengthened by this faith, she was bold to
confront her father.
She tapped at the door and entered.
She saw at once that he had heard her voice without, and was
expecting her. There was anger in his strange eyes, and a hectic
colour in his hollow cheeks. He was partly dressed, and sat on the
side of the bed. In his hand he held the stick with which he was
wont to rap when he needed assistance.
‘Where are the clothes that lay on the floor last night?’ was his
salutation, pointing with the stick to the spot whence Barbara had
gathered them up.
‘They are gone, papa; I have taken them away.’
She looked him firmly in the face with her honest eyes,
unwincing. He, however, was unable to meet her steadfast gaze. His
eyes flickered and fell. His mouth was drawn and set with a hard,
cruel expression, such as his face rarely wore; a look which
sometimes formed, but was as quickly effaced by a wave of
weakness. Now, however, the expression was fixed.
‘I forbade you to touch them. Did you hear me?’
‘Yes, dear papa, I have disobeyed you, and I am sorry to have
offended you; but I cannot say that I repent having taken the
clothes away. I found them, and I had a right to remove them.’
‘Bring them here immediately.’
‘I cannot do so. I have destroyed them.’
‘You have dared to do that!’ His eyes began to kindle and the
colour left his cheeks, which became white as chalk. Barbara saw
that he had lost command over himself. His feeble reason was
overwhelmed by passion.
‘Papa,’ she said, in her calmest tones, ‘I have never disobeyed
you before. Only on this one occasion my conscience——’
‘Conscience!’ he cried. ‘I have a conscience in a thornbush, and
yours is asleep in feathers. You have dared to creep in here like a
thief in the night and steal from me what I ordered you to leave.’
He was playing with his stick, clutching it in the middle and
turning it. With his other hand he clutched and twisted and almost
tore the sheets. Barbara believed that he would strike her, but when
he said ‘Come here,’ she approached him, looking him full in the face
without shrinking.
She knew that he was not responsible for what he did, yet she
did not hesitate about obeying his command to approach. She had
disobeyed him in the night in a matter concerning another, to save
that other; she would not disobey now to save herself.
His face was ugly with unreasoning fury, and his eyes wilder than
she had seen them before. He held up the stick.
‘Papa,’ she said, ‘not your right arm, or you will reopen the
wound.’
Her calmness impressed him. He changed the stick into his left
hand, and, gathering up the sheet into a knot, thrust it into his
mouth and bit into it.
Was the moment come that Barbara had long dreaded? And was
she to be the one on whom his madness first displayed itself?
‘Papa,’ she said, ‘I will take any punishment you think fit, but,
pray, do not strike me, I cannot bear that—not for my own sake, but
for yours.’
He paid no attention to her remonstrance, but raised the stick,
holding it by the ferule.
Steadily looking into his sparkling eyes, Barbara repeated the
words he had muttered and cried in his sleep, ‘De profundis clamavi
ad te, Domine. Si iniquitates observaveris, quis sustinebit?’
Then, as in a dissolving view on a sheet one scene changes into
another, so in his wild eyes the expression of rage shifted to one of
fear; he dropped the stick, and Jasper, who at that moment entered,
took it and laid it beyond his reach.
Mr. Jordan fell back on his pillow and moaned, and put his hands
over his brow, and beat his temples with his palms. He would not
look at his daughter again, but peevishly turned his face away.
Now Barbara’s strength deserted her; she felt as if the floor
under her feet were rolling and as if the walls of the room were
contracting upon her.
‘I must have air,’ she said. Jasper caught her arm and led her
through the hall into the garden.
Eve, alarmed to see her sister so colourless, ran to support her
on the other side, and overwhelmed her with inconsiderate
attentions.
‘You must allow her time to recover herself,’ said Jasper. ‘Miss
Jordan has been up a good part of the night. The horses on the
down were driven on the premises by the fire and alarmed her and
made her rise. She will be well directly.’
‘I am already recovered,’ said Barbara, with affected
cheerfulness. ‘The room was close. I should like to be left a little bit
in the sun and air, by myself, and to myself.’
Eve readily ran back to her burnishing of the gold beads and
bezants, and Jasper heard Mr. Jordan calling him, so he went to his
room. He found the sick gentleman with clouded brow and closed
lips, and eyes that gave him furtive glances but could not look at
him steadily.
‘Jasper Babb,’ said Mr. Jordan, ‘I do not wish you to leave the
house or its immediate precincts to-day. Jane has not returned, Eve
is unreliable, and Barbara overstrained.’
‘Yes, sir, I will do as you wish.’
‘On no account leave. Send Miss Jordan to me when she is
better.’
When, about half-an-hour after, Barbara entered the room, she
went direct to her father to kiss him, but he repelled her.
‘What did you mean,’ he asked, without looking at her, ‘by those
words of the Psalm?’
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