Management Communication Essay Example | Topics and Well Written Essays - 1750 words

Management Communication - Essay Example Good managers must also act as good leaders. The leadership role that is played by the manager is one of the most important functions that have to be performed by the management. In playing the role of a leader, the manager is involved in various activities that relate to lead the organization to function in a particular direction. The management works to provide direction for the organization on various issues. Great managers are also great leaders. Therefore they play the role of leading others who are under their influence. There have been raging debates on the issue of whether leaders are born or they are made. But one of the most important thing to realize here is that the role of leadership is based on some important skills that an individual posses and some which an individual learns in the process. This is because to be a good leader one does not require one attribute but is made up of specific array of attributes. A good leader must have the confidence to stand in front of other and provide them with direction. A good leader must be able to think in the sense that they must be able to gather, sort and structures information before passing it on to others. They must be able to develop a vision for the organization. ... However the most important aspect of any leader is that they must be able to communication effectively with others. This has been considered as the watershed capacity in leadership. This is because the leader plays the role of informing others, convincing others, uniting others, motivating others and directing others. These things require the leader to have effective communication skill in order to show others where the organization is heading. The effectiveness of a leader lies in their power to inform and persuade others which helps them to win battles for the hearts and the minds of the employees. (Baldoni, 2007) Good leaders are effecting because they have the power to convince others. They use a variety of strategies in order to convince others to follow them. Good managers ensure that they are good listeners and they other time to express themselves. They also ensure that they don't rush to make judgments. They will also ensure that there is an effective feedback mechanism in the organization. For example a good leader will ensure that they talk directly with their workers instead of using mediators. In this way they are able to learn the mood and response of the workers. Strategic organization communication Communication in an organization is very strategic in the sense that is one of the strategic factors that determine the viability of the performance of the organization. It is one of the components of organization strategy and it helps an organization to function even in difficult situations. It is strategic in the sense that it requires to be planned in advance as a part of the overall growth strategy of the organization. It is also strategic in the sense that it will have to be changed on the process of

Classical Theory of International Trade

Classical Theory of International Trade The purpose of this chapter is to review the existing body of knowledge about foreign direct investment and the studies on strategies adopted to attract FDI. It attempts to present a summary of the relevant theories, hypotheses and schools of thought that contribute to the understanding and fundamental motivation of FDI flows. An exploration of these theories will assist in the study and it will support arguments to be used in empirical estimation and discussion. Additionally the aim of this chapter is to review the theoretical approaches to the determinants of FDI, also known as private foreign investment. Various theories have been developed since the World War II to explain FDI. These theories state that a number of determinants both at micro and macro level could explain FDI flows in a particular country or a particular region. Various studies have also been published on the assessment of the key determinants of FDI. However, there is no general agreement insofar, especially that in different context, specific factors may vary significantly in their degree of importance as regards to FDI. 2.2 Definition of FDI Foreign direct investment (FDI) is a category of investment that reflects the objective of establishing a lasting interest by a resident enterprise in one economy (direct investor) in an enterprise (direct investment enterprise) that is resident in an economy other than that of the direct investor. The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the enterprise. The direct or indirect ownership of 10% or more of the voting power of an enterprise resident in one economy by an investor resident in another economy is evidence of such a relationship (OECD, year 2008 Benchmark Definition of Foreign Direct Investment 4th Edition). The Benchmark Definition is fully compatible with the underlying concepts and definitions of the International Monetary Funds (IMF) Balance of Payments and International Investment Positions Manual, 6th edition (BPM6) and the general economic concepts set out by the United Nations System of National Accounts (SNA). In accordance with the Organisation for Economic Co-operation and Developments (OECD) Benchmark Definition, Foreign Direct Investment (FDI) is said to be an investment which entails a long duration equation and is an indication of sustained interest and authority by a hosted firm in an economy (foreign direct investor or origin firm) in a firm hosted in a country other than that of the foreign direct investor (FDI firm or associated firm of foreign affiliate). FDI entails both the initial dealing between two enterprises and all following money dealing between them and amid the associated firm, both integrated and non-integrated (OECD, 2008). The concept of FDI took prominence in 1962 following the publication of an article- Development Alternatives in an Open Economy by Hollis Chenery and Michael Bruno wherein a two-gap analysis of capital requirements was formulated. They pointed out that foreign investment apart from foreign aid and foreign trade was important to fill the resource gap needed to finance economic development especially for countries where their imports exceed their exports. FDI stimulates larger flows of private capital for the development of the recipient countries. Increase in FDI is not enough. It must ensure that the said increase is meeting the development objectives of the recipient countries. FDI must go beyond private while government must ensure that risks are not too high or the return on investment is not too low. Being given that private capital offers some special advantages over public capital, there must be a mutual interest for both private foreign investors and the host country. The latt er will have to assist in securing information on investment opportunities and establish economic overhead facilities such as industrial estates, protective tariffs, exemption from import duties and tax concessions schemes. 2.3 Theories of FDI Over the past few decades, extensive research have been conducted on the behaviour of multinational firms and determinants of FDI and many authors have put forward various theories (and complementary) to explain them. Theories and contexts that are being developed are challenging established facts, systems and knowledge bases. Though many theories have been developed to explain various dimensions of FDI, the current chapter will endeavour to examine the following paradigms considering the scope of the present study namely: the classical international trade theory, the neoclassical location theory, the market imperfection theory, the OLI paradigm and Porters Diamond theory. Broadly speaking the theories could be classified as international trade theories dealing with comparative advantage for nations to go for trade and foreign direct investment theories relating to corporate advantage for foreign corporations  entering the host countries. 2.3.1 Classical Theories of International Trade The concept of FDI cannot be disassociated with the basis of why countries trade and the latter has been pioneered by the famous classicists namely Adam Smith (1776) with his Absolute Advantage theory and David Ricardo (1819) with his Comparative Advantage theory of trade. Adam Smith, the founder of economic theory, was the first to broach in Wealth of Nations that business would grow internationally for real economic growth. Both Smith and Ricardo concluded that countries would benefit from international trade if they have an absolute and comparative advantage in those products that they would be exporting and they should import those goods for which they have an absolute and comparative disadvantage. Consequently they were of the opinion that there should be complete specialisation by the countries involved in international trade based on the same principle as that of division of labour. They based their reasoning on the labour theory of value. The labour theory of value states that the value or price of a commodity is equal to or can be inferred from the amount of labour time going into the production of the goods. It, however, assumes that labour is the only factor of production and that it is also homogeneous. Because of these restrictive assumptions, the labour theory of value was contested and replaced by the opportunity cost advantage propounded by G.Haberler in 1936. The latter emphasised more on how a country has a comparative advantage rather than on what are the determinants of comparative advantage. It says that the cost of a commodity is the amount of a second commodity that must be given up in order to release just enough factors of production or resources to be able to produce one additional unit of the first  commodity. Consequently labour will not be the only factor of production and will not be homogeneous. 2.3.2 The Heckscher-Ohlin (HO) Theory The HO theory also known as factor endowment model was put forward by Heckscher (1919) and Ohlin (1933) and was among the modern theories of international trade showing the causes of international trade. Adam Smith and David Ricardo remained silent on the causes of trade and on how trade affects factor prices and the distribution of income in each of the trading nations. The HO theorem postulates that each nation will export the commodity intensive in its  relatively abundant and cheap factor and import the commodity intensive in its relatively scarce and expensive factors of production. It implies that a country must have the necessary resources to export goods. Some of the assumptions of the model again act as its own limitations on its effectiveness namely when it comes to free trade with no transport costs, tastes are similar across countries, perfect competition in factor and commodity markets, factors immobility internationally, use of same technology in the production of the two goods andtwo factors of production and two countries model (2x2x2 model). There has been extensions to the HO model namely through the Stolper-Samuelson model (1949) and Rybczynski theorem (1955). These theorems postulate that trade leads to the equalisation of relative and absolute factor prices between nations so that there will be internationalisation of prices and wages based on still the restrictive assumptions as those under the HO model. As Faeth (2009) and Seetanah and Rojid (2011) highlight, the first explanations of FDI were based on the models propounded by Heckscher-Ohlin (1933), according to which FDI was motivated by higher profitability in foreign markets with the possibility to finance these investments at relatively low rates of interest in the host country. Ohlin also observed that availability and securing sources of raw materials, flexible and business friendly trade policies as well as accessibility and availability of factors of production were the components influencing FDI inflows into the country. 2.3.3 Modern International Trade Theories There have been empirical tests concerning the traditional trade theories namely the Ricardian and HO models. Some tests have gone according to the theories while others have disproved them. For instance Sir Donald MacDougall in 1951 tested the Ricardian theory using the 1937 data for the USA and UK for 25 industry groups whereby it was found that US wages were twice as those for UK resulting in the USA being capital intensive while UK being labour intensive. However, according to Dougall there is incomplete specialisation as opposed to complete specialisation proposed in the Ricardian model. This is based on the fact that tastes are different, products are non-homogeneous, transport costs matter and industry groups are highly aggregated where we can have different model for a particular products like cars and cigarettes. The USA may have comparative advantage in cars but this does not prevent the UK from exporting one or two different models. Sir Donald MacDougall has also in 1960 talked about the benefits and costs associated with private investment from abroad. He pointed out that an increase in FDI will lead to an increase in real income based on the fact that value added to output by foreign capital is greater than the amount appropriated by the foreign investor as foreign capital raises overall productivity in the host country. With FDI, social returns are far greater than private returns based, inter alia, on the  following: (a) Domestic labour having a higher real wages; (b) Consumers having better choice with lower prices; (c) Host Government getting higher tax revenue; (d) Realisation of external economies of scale; (e) An alternative to labour migration from the poor country; (f) Increase in managerial ability and technical personnel; (g) Transfer of technology and innovation in products; and (h) Serving as a stimulus for additional domestic investment. However, Sir Dougall also warned that there is need for the host country to have the right additional public expenditure as foreign investors are likely to be less interested in receiving an exemption after a profit is made than in being sure of a profit in the first instance. Wassily Leontief tested the HO theory in 1951 and 1956 and found that the USA imports competing were about 30% more capital intensive than its exports. Since the USA was the most capital abundant nation, this result was the opposite of what the HO theory predicted and this became known as the Leontief paradox. Although subsequently the Leontief paradox was partly resolved in the 1980s, it led to the spring ball of modern theories of trade namely Linders thesis (Similar Preference Model or Spillover Theory), Posners Model (Technological Gap Model or Innovation -Imitation Model) in 1961 and the Product Cycle theory of Vernon in 1966. The HO model is inappropriate in explaining trade between countries with the same level of development while with the Spillover theory especially concerning manufactured goods, industrialised countries which have similar factor abundant can trade together. The Linders thesis rests on the belief that a country will export a particular commodity if it has a domestic market for the goods. In fact, domestic market is exploited first. If there are economies of scale in the domestic market, there will be a cost advantage to make export possible. Goods will be exported to countries with similar tastes and similar level of development so that trade will take place with countries of similar living standards. The technological gap theory is typical for the industrialised countries. It states that new products are likely to emerge in the market as a result of innovation. At first production is made for the domestic market. Then firms which bring forth these products have economic rent so that they have strong monopoly position. This makes it easier to tap international market. But this product in question is imitated overseas after some time period. Therefore, there is a shift in comparative advantage. So, we can say that there is an innovation-imitation process. We talk of technological gap because there is a gap between the country which invent the product and those which imitate them. The product life cycle model is an extension of the technological gap model. It states that any product moves through different stages or cycles and comparative advantage keeps shifting during these stages. There are four stages namely: Stage I New product for domestic market only Stage II If product is successful, there is overseas demand so that exportation will be possible Stage III Exports decline because overseas firms produce the goods due to innovation-imitation theory Stage IV Because of comparative advantage, the second country export the product to the first country, that is, the latter will start importing the goods which only a few years back was exporting it. Vernon (1966) explained that FDI will occur when the product enters its mature stage in the product life cycle hypothesis. Vernon (1979) re-examined his own theory and came to the conclusion that the cycle has shortened considerably whereby multinational companies are now more geographically diffused. 2.3.4 Market Imperfections Theories The suggestion that FDI is a product of market imperfection was first discussed by Hymer (1976). He also confirms that investment abroad involves high costs and risks inherent to the drawbacks faced by multinationals because they are foreign. The model was later extended by Caves (1971) and Buckley and Casson (1976) into the internationalisation theory. Hymer shifted the theory of FDI out of the neoclassical international trade theories and into industrial organization (the study of market imperfections). He also argued that there are two factors motivating FDI, namely: (i) the attempt to reduce and/or remove international competition among firms; and (ii) the desire of Multinational Corporations (MNCs) to increase their returns from the utilization of their special advantages. Foreign firms face disadvantages compared to domestic firms, mainly due to the extra costs of doing business in an alien territory and given the information on cost disadvantages, a foreign firm will engage in FDI activity only if it enjoys offsetting advantages such as superior/newer technology, better products or simply firm-level economies of scale. Buckley and Casson (1976) talked about the internalization theory of foreign direct investment. An important pre-requisite for internalisation whether being executed vertically or horizontally, is the existence of an imperfect market. They stated that there are two ways in which a firm can internalise namely by replacing a contractual relationship with unified ownership and secondly by internalising an advantage such as production knowledge through the establishment of a market where there is initially an absent of the said market. Together with the internalisation theory, there is the transaction cost theory put forward by Williamson (1975). He investigated whether a firms transactions are governed by hierarchy or the market. He identified three dimensions to this problem, namely (i) the frequency with which a transaction occurs; (ii) asset specificity; and (iii) uncertainty in the presence of uncertainty and also as uncertainty increases, it is better to govern through a hierarchy rather than through the market and vice versa. Caves (1982) also developed the rationale for horizontal integration (specialised intangible assets with low marginal costs of expansion) and vertical integration (reduction of uncertainty and building of barriers to entry). 2.3.5 The OLI Paradigm John Dunning (1988) in his Explaining International Production proposed an eclectic paradigm also known as the ownership-location-internalisation (OLI) paradigm. The OLI paradigm argued that FDI activity is determined by a composite of three sets of forces namely: Foreign firms enjoying ownership advantages in the form of better technology, product quality, or simply brand name, and other organizational knowledge that are not available to local firms. In other words, it refers to the competitive advantages which firms of one country possess over firms of another country in supplying a particular market or set of markets through product differentiation. These advantages may accrue either from the firms privileged ownership of assets or from their ability to co-ordinate these assets (common management strategy with a global scanning capacity) with other assets across national boundaries in a way that benefits them relative to their competitors;   Foreign firms can benefit from location advantages. This will make FDI activity more profitable than exporting. Examples can be: availability of cheap labour or other factors of production; market size, lower transportation cost, and trade barriers. This refers to the extent to which firms choose to locate value-adding activities outside their national jurisdictions; Foreign firms may seek internalisation advantages which arise when ownership advantages are best exploited internally rather than when offered to other firms through contractual arrangements, i.e. franchising, management contract etc. In other words, we here refer to the extent to which firms perceive it to be in their best interests to internalise foreign markets for the generation and/or use of their assets with a view to add value to them and reduce the high information costs. The significance of the eclectic paradigm, however, varies across industries, countries and firms. Another problem with the eclectic paradigm is that each of the Ownership, Location and Internalisation variables tends to be interdependent. For instance, a firms response to the independent locational variables may influence its ownership advantages and also its willingness to internalise markets. This is well known as the problem of multicollinearity among exogenous variables which can reduce the empirical validity of the model. 2.3.6 Porters Diamond Theory Porters Diamond Theory (1990) emphasises global patterns of FDI based on different country characteristics. He explained why certain countries tend to become leaders in some activities by using examples of sophisticated industries. According to him, firms that have successfully globalised their production activities have done so because of their ability to carry their home-based advantages in foreign market. Taking from the shape of a diamond, Porter (1990) maps out that there are four endogenous variables that would affect the decision of the multinational firms to compete internationally. These factors are: Factor conditions the countrys position in terms of factors of production such as infrastructure and skilled labour necessary to compete in a given industry; Demand conditions the nature of home demand for the industrys product or service; Related and supporting industries the presence or absence in the country of supplier industries and related industries that is internationally competitive; and Firm strategy, structure and rivalry the conditions in the country governing how companies are created, organized, and managed, and the nature of domestic rivalry. The role of government and chance are taken as exogenous variables in the model which can influence to a great extent any of the four endogenous variables. Government policy can either impede or help a firms progress and innovation. Chance events can come in the form of technological advancements that create a national competitive advantage for a firm. Porter (1990) stated that different dynamics may exist between the endogenous and exogenous variables, depending on what drives FDI flows namely factor-driven, innovation-driven and wealthdriven. The factor-driven and innovation-driven can be associated with continuous improvement of a countrys competitive advantages that contribute to the development of an economy. On the other hand, the wealth-driven cause can be associated with stagnation and continuous decline that perpetuate a countrys declining economy. The components identified by Porter (1990) are to some extent similar to the host-country characteristics that Dunning (1988) ou tlined in his OLI paradigm. 2.4 Determinants of FDIs Empirical Survey There has been an extensive body of empirical studies trying to explain why some countries were more successful than others in attracting FDI (Moosa Cardak 2003). This plethora of empirical studies have tested and explored the effect of a range of macroeconomic determinants including GDP, GDP growth rate, real GDP per capita, exchange rate policy, openness of the economy, financial stability and physical infrastructure among others. There have also been studies dealing with the impact of socio-political factors such as political stability, education, corruption, political freedom etc., on FDI flows (Dar et al., 2004). The empirical investigation in this paper focuses more on the macroeconomic determinants (pull factors) that will influence the FDI flows in the host country in particular Mauritius by using a time series analysis. Although there have been diverse methodologies used for the determinants of FDIs, it has also been controversial (especially when it comes to the causality effect between FDI and economic growth) so that it is difficult to have a simple model or any strong theoretical foundation to guide an empirical analysis on these issues. Kok, R and Ersoy B A in 2009 have stated that A large number of studies have been conducted to identify the determinants of FDI but no consensus has emerged, in the sense that there is no widely accepted set of explanatory variables that can be regarded as true determinants of FDI. While some parameters are comprehensively discussed and of high relevance, it remains unclear how these interact. However, the results of past studies be it panel data or t ime series analysis for a specific category of countries or regions have been employed as an imperfect but useful guide. Given the vast amount of empirical literature on the determinants of FDI especially during the last few decades, the present section will elaborate on those studies which take on board Mauritius be it as small island economies or as a regional economic community namely SADC, Sub-Saharan African countries. Also those studies will be taken on board where time series analysis have been undertaken for specific countries using almost the same key determinants for FDI as those being proposed in the model of this paper. Wint and Williams (2002), Thomas et al (2005) and Wijeweera and Mounter (2008) have been using economic factors such as the target countrys market size, income level, market growth rate, inflation rates, interest rate and current account positions to explain the determinants of FDI. They found that a positive interest rate differential assist in attracting FDI inflows as MNCs get the incentive to invest in foreign countries with positive interest rate differential barring the fact that there is no major fluctuation in the exchange rate. In the same vein, Cleeve  (2008) using a multivariate regression model for 16 Sub Saharan Countries and trying to capture economic stability through the proxy (nominal exchange rate adjusted deflator), has shown that this variable is statistically effective. Rogoff and Reinhart (2002) and Wint and Williams (2002) show that a stable country attracts more FDI implying that a low inflation environment is desirable to promote capital inflows. Ali and Guo (2005) and Choudhury and Mavrotas (2006) have indicated that there is a strong relationship between the money growth acting as a proxy for financial stability in the host country and its effects in attracting FDI. Asiedu (2006) using a panel data for 22 Sub Saharan African countries has also shown that inflation rate depicts a negatively and statistically significant effect. However, under Mhlanga et al (2010) multivariate regression model for 14 SADC countries (Southern African Development Community), the inflation rate independent variable does not have any effect as it is statistically insignificant. In terms of the importance of capturing human capital development, both Asiedu (2006) and Cleeve (2008) made use of the percentage of adult literacy and secondary school education index respectively. Both indicators have proved to be not only positive (that is higher stock of human capital will increase FDI) but also statistically significant. According to Helleiner (1998), investment incentives by host country such as tax holiday appear to play a limited role to attract the MNCs as those incentives are believed to compensate for other comparative disadvantages. On the contrary, it is generally believed that removing restrictions and providing good operating conditions will positively affect FDI inflows. This has been reinforced through Cleeve (2008) whereby he found that proxies like temporary tax incentives, tax concessions and profit repatriation when used to capture financial and economic  incentives are statistically insignificant. It goes without saying that in order to attract FDI, economic liberalization is important both internally and externally. This has been translated in several empirical studies even for SADC countries and Sub Saharan African countries from Cleeve (2008) and Mhlanga et al (2010). The famous proxy used for openness of the economy, remains the total value of exports plus imports divided by the level of national income (GDP) although Asiedu (2006) uses an openness index from the International Country Risk Guide which also proved to be positive and statistically significant. In 2008, D.Ramjee Singh, Hilton McDavid, A.Birch and Allan Wright used a linear cross-sectional model of 29 small developing countries having a population of less than 5 million to test for the statistical significance of the determinants of FDI. They found that several of the traditional variables such as infrastructure, economic growth and openness to trade do promote the flow of FDI to small developing nation states. The focus of tourism has also been highlighted in the study. Contrary to expectation the role of market size as a determinant was found to be insignificant basically as the sample taken being small economies. With regard to infrastructure per se, Asiedu (2006) and Mhlanga et al (2010) have pointed out that the proxies (number of phone lines per 1,000 inhabitants and number of landline and mobile subscribers per 1,000 inhabitants) did matter for the 22 Sub Saharan African countries and 14 SADC countries respectively. There has been previous research done with regards to the determinants of FDI in  Mauritius (Seetanah B and Rojid S; 2011) applying a reduced-form specification for a demand for inward direct investment function using dynamic framework and a differenced vector autoregressive model using data from 1990 to 2007. The variables used were size of the country, wage rate, trade/GDP, the secondary education enrolment rate and tax rate. The findings revealed that the most instrumental factors appear to be trade openness, wages and quality of labour in the country. Size of market is reported to have relatively lesser impact on FDI. The present research would use more independent variables in view of capturing a maximum variation of the model and also using data from year 1976 to 2011 which would enable the capturing of the impact of the global financial crisis of 2007/2008. There were also important policy decisions taken in the period post 2006 and the present model would try to capture the effect of those important policies. New explanatory variables would supplement the existing literature on the determinants of FDI in Mauritius and trying to use those independent variables would capture the maximum variation in the FDI inflows.

Free Affirmative Action Essays - Im White, Angry, and Against Affirmative Action :: affirmative action argumentative persuasive

I'm White, Angry, and Against Affirmative Action      Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Papers are piling up on top of a desk.   People are running around trying to meet their deadlines.   Assignments are being pushed back to later dates.   Phones are being answered, but put on hold for the next available representatives.   The president of the firm puts out a notice of hire.   The word is spread throughout the business community through the newspaper and the internet.   Resumes are received every business day.   The board members of the firm review hundreds of resumes that are received daily.   They rate the applications according to qualifications and experiences.   The names are disregarded at this point.   A dozen of the applicants are chosen, and notified to setup initial interviews.   One applicant meets all the qualifications, and has had numerous experiences in the field.   This applicant clearly surpasses all the other applicants.   The commitee is very impressed by this young man.   He heads home in delight, hoping to hear from the marketing firm again.   Unfortunately, he never hears from   them again.   The main reason why   he was not chosen, was because of the color of his skin.   Since he is Asian, they could not hire him, because 50% of their employees are Asian.   Under the affirmative action, they must employ someone who is underrepresented.   This type of situation happens often.   It is not the qualifications, but the color of the skin that employers look for today.   Affirmative action is a step backwards.   We are back to color and race differences.   We are all Americans and should be treated as so, not what ethnicity we are.   Affirmative action should be abolished solely because we do not want to make the same mistake our society made in the past --- discriminate according to color.   Two wrongs do not make a right.      Ã‚  Ã‚  Ã‚  Ã‚   Many people say that we should keep affirmative action to render fairness to the minorities because of the wrongs that was once put on to them.   This simply does not make sense.   To compensate someone, a person must have gone through an experience.   People today did not go through such discrimination, as their past ancestors.   How can we punish someone for what they had no control?   Our white society today did not commit the

How the National Debt Crisis Affects My Life

How the National Debt Crisis Affects My Life Today the debate over the national debt crisis has many U. S. citizens concern about their financial future. With our national debt ceiling set at 14. 3 trillion dollars, and with debt rapidly accruing, the decision to raise the debt ceiling must be made soon. Although both the Democratic and Republican parties have their own opinions on how to fix the issue, a decision must be made before August 2, 2011. Without a solution, the Treasury would not have the authority to borrow any more money. This means that the nation will be unable to make the necessary payments on debt, and also will result in defaulting on prior obligations. While both Democrats and Republicans debate on what’s best, my worries of financial security and my future goals seem to be in jeopardy. As I watch the debates on whether to raise taxes, lower taxes, cut social security, or decrease funding, the more my stress levels seem to rise. As an enlisted member of the U. S. Air Force, my financial stability comes from the decisions of the government. The ability to provide food, shelter and clothing for my family is very important to me. Although I’ve managed to save money, it’s not enough to cover the effects of missing a full month’s pay. According to Dr. Alan Manevitz â€Å"As Americans continue to face rising gas and food costs, some individuals are actually becoming physically sick from financial worries† (Manevitz, 2008). When there’s no money to fill the piggy banks, I often ask myself â€Å"how will we survive†? The thought of not knowing where our next meal will come from sickens me to my core. The stress involved continues to rise as I wait. No one knows at this point what decision will be implemented. Either way, the need for tighter budgets within my internal and external family will need to transpire. Because of the current events involving the national debt crisis, we’ve been forced to cut back on the things that provide comfort to my family as a whole. Tighter budgets in my household means a lack of leisure activities, smaller meals, and cutting back on just about anything we can think of. All of the things that heighten moral will be replaced with more creative money saving aspects. Although this plan may improve our financial status overall, no one likes to live significantly below their means. If Congress doesn't raise the debt limit, all active duty members of the military would stop getting paid next month (O'Mara, 2011). Where the military was once the saving grace for financial stability amongst the middle class, the outlook is looking dim as we wait for a decision. This ultimately puts my plans of future endeavors at a standstill. Having goals and not being able to reach them makes me feel inferior. It is the glue-less fabric of my slow demise. My dreams of being financially stable are in the hands of lawmakers. Based on the odds, both ends of the spectrum are not pleasing to my heart. Like many of my fellow Americans, I would love the opportunity to live the dream. Finding funding to support my entrepreneurial endeavors seem slim to none or very vague. Without bootstrapping cash, my startup ideas cease to exist until further notice. Banks are now limited on the amount they can lend due to constraints. They also would like to know that I contributed a good percentage of the necessary startup capital into the business (Dun & Bradstreet, 2011). This seems impossible when making sure every penny is put into the best place. I can’t forget about my dreams of getting engaged to my beautiful girlfriend. Numerous studies have shown that money is the No. 1 reason why couples argue and many of the recently divorced say those battles were the main reason why they untied the knot (Todorova, 200,). That’s a scary thought when thinking about getting married. It’s an even scarier thought when thinking about having children. Knowing that we would be raising them to eventually incur our debts as a society is devastating. In conclusion, a decision on what to do next as a nation has to be made. The overall outcome of this decision will affect every person in the United States. From business owners to employees, we will all need to find our means to survive. Whether it’s through controlled spending or working multiple jobs, more money has to be put away in a secure place. It’s up to the Democratic and Republican parties to decide on a solution at this point, and hopefully the worries of financial stability will diminish in the eyes of many. It’s time for the government to take a stand and make the impossible possible. ? References Dun & Bradstreet. (2011, March). Bank Loans For Small Businesses. Retrieved from http://smallbusiness. dnb. com/business-finance/business-loans/2542-1. html Manevitz, A. (2008, June). Debt Stress Making People Sick. Retrieved from http://http://www. cbsnews. com/video/watch/? id=4181440n O'Mara, M. (2011, July 14). Debt Crisis Could Delay Military Pay. Retrieved from http://www. ktvb. com/community/blogs/maggie-omara/Debt-crisis-could-delay-military-pay–125566258. html Todorova, A. (200, June 11). The Six Financial Mistakes Couples Make. Retrieved from http://www. smartmoney. com/spend/family-money/the-six-financial-mistakes-couples-make-15414/

Hamlet: The Tragic Hero Essay

Hamlet’s flaw is that he has a hard time carrying out his plans; he does not have the raw passion that enraged Laertes (). Hamlet took time to think about his actions and the consequences for his plans, many times did he think of doing them, yet he did not carry out them out. Hamlet was not a forgetful, evil character, but more of a tragic hero. The beginning of the play sets out the story and the Ghost of Hamlet’s late father reveals the truth about his murder to his son. He tells Hamlet to avenge his death. Hamlet’s response seems like he has quick plans to carry out his fathers wishing, by saying â€Å"Haste me to know’t that I with winds as swift†¦ May sweep to my revenge.† (I v 33-5) Unfortunately, Hamlet’s inability to act on his father’s extortion has him reluctant to kill the King Claudius by the end of that very scene, when he says, â€Å"This time is out of joint, O cursed spite – that I was ever born to set it right.† (I v 206-7) Here, Hamlet is already having doubts and wishing that he wasn’t the one that had to carry out the revenge for his father. Obviously Hamlet has real problems when it comes down to dealing with things. As the play goes on, Hamlet still has not done a thing to avenge his father. In Act II, Scene 2, Hamlet decides that before he can avenge his father’s death, he must make sure that the Ghost was telling the truth. This simply gives Hamlet more excuse to procrastinate. Hamlets play is a parody of the way Claudius killed the previous king and took his wife. When the play is seen by Claudius, Claudius becomes outraged and ends the play. Hamlet knows now that Claudius is guilty. He justifies this inaction by saying â€Å"The spirit I have seen – May be the devil†¦Ã¢â‚¬  He is very firm in his believe of faith and he does not want to be pulled into Hell because of a filthy deed given to him by a demon. However, because of Claudius’ reaction, Hamlet knews the ghost was true. He comments to Horatio, â€Å"I’ll take the ghost’s word for a thousand pound.† In act III, scene 3, Hamlet is ready to kill the king, but stops himself because the king is praying. Again Hamlet’s faith stops him from the horrid act of regicide. Because the king is praying that if he killed him now the  king would go to heaven. He decides yet again to delay avenging his father’s murder, this time until he can kill the King while he is in a vile condition, such as â€Å"When he is drunk asleep; or in his rage; Or in the incestuous pleasure of his bed.† (III iii 92-3) In the end of the play, we see that Hamlet’s inability to act causes his tragic demise. Hamlets failure to revenge his father when he should have, costs him not only his life, but also his mother’s. In the final scene, Hamlet duels with Laertes, who has conspired with the King to kill Hamlet. In the King’s attempt to kill Hamlet, he accidentally poisons the Queen. Laertes delivers the fatal wound to Hamlet with a sword dipped in a deadly poison and it is only with his final life breath that Hamlet finally kills the King. So, Hamlet has finally killed the king, but not by going out and slaying the king while he was involved in â€Å"incestuous sheets† or â€Å"drunk asleep† like he said, but with a poison the king made himself to kill Hamlet. Ultimately, Hamlet avenged his father, and his father’s later wish for the queen to be left to die without Hamlet killing her. However it came at a very heavy cost; Hamlet, Laertes, and Gertrude’s deaths, and Denmark falling into the hands of the Norwegian enemy, Fortinbras.

Legalization of Industrialized Hemp †Science Essay

Legalization of Industrialized Hemp – Science Essay Free Online Research Papers Traditionally, the government has been against the legalization of hemp due to fear that growers could use the guise of hemp’s many attributes to disguise the THC content in Hemp. This is an archaic stance and the government’s near sightedness on this issue, hinders America from reaping the many benefit’s of industrialized hemp production. An example of industrialized hemp productions benefits is using hemp cellulose matter to replace wood products helping save our ever-shrinking national forests. Another benefit of hemp production is the environmental superiority of hemp-based clothing over traditional cotton based products. Advantages to the legalization of industrialized hemp far outweigh the government’s opposition to the proposal. Senator Cantwell, congress should move to legalize industrialized hemp production now. Researchers have proven that using hemp cellulose matter to replace wood products could very well become a viable option in the fight to save our depleting national forests. Construction products such as medium density fiber board, oriented strand board, and even studs and posts could be made out of hemp. Because of hemp’s long fibers, the products will be stronger and/or lighter than those made of wood (worrell). Another fact which requires serious consideration, one acre of hemp (grown in a single season) yields as much paper as up to four acres of trees (which take many more years to grow) (soiferman). Another side of the debate that should be given some reflection is the difference in the environmental effects of processing wood as opposed to hemp. Most notable of these differences is the chemical requirements of pulping both hemp and wood. For example, because of hemp’s low lignin content, it can be pulped using fewer chemicals than wood. Hemp’s natural brightness can obviate the need to use chlorine bleach, which means no extremely toxic dioxin being dumped into streams. A kinder and gentler chemistry using hydrogen pero xide rather than chlorine dioxide is possible with hemp fibers (worrell). One positive effect of the environmentally safer chemical processes is the fact the run off water from the processing plant could be used to irrigate future crops of the plant. This is important because any chemicals we allow to run off from our nation’s factories find their way into our water tables, and possibly into our livestock’s water supplies. By limiting the amount of water resources we are forced to use processing hemp, we can limit the environmental footprint of these facilities. By fully exploring the various ways hemp could be used to replace wood products our generation would be responsible for saving our precious forests. Before we can take an educated stance on the differences between hemp and cotton we would first have to look at the chemical requirements of growing each crop. To begin with, cotton crops in the United States occupy 1% of the country’s farmland but use 50% of all pesticides (soiferman). Fifty percent of all pesticides used in the United States is alarming when you take into consideration just how many different crops the United States grows each year. Hemp grows well in a variety of climates and soil types opening opportunities to new farming markets. Hemp is naturally resistant to most pests, precluding the need for pesticides. It grows tightly spaced, out-competing any weeds, so herbicides are not necessary. Hemp also leaves a weed-free field for a following crop (worrell). The use of pesticides has adversely affected the very health of our planet, and it is important to mention we as a society are still discovering the true devastation our choices are having on our s urroundings. The pesticides and synthetic fertilizers used on cotton routinely contaminate groundwater, surface water, and pollute the water we drink. Fish, birds and other wildlife are also affected by the movement of these chemicals through the ecosystem (lotusorganics). Between hemp’s ability to grow virtually anywhere, and the proven environmental benefits of not requiring chemicals to sustain a crop, we owe it to ourselves to give hemp the chance it deserves. Now that the environmental differences between hemp and cotton have been described, products made from both hemp and cotton should be examined. The differences in products are very clear, hemp is four times warmer than cotton, four times more water absorbent, and has three times the tensile strength of cotton (soiferman). Hemp is also many times more durable and is naturally flame retardant (soiferman). Over the last few years hemp has begun to establish itself in the world’s clothing market with name brand manufactures taking advantage of foreign grown hemp to produce their products. Many high fashion clothing manufactures have produced clothes and footwear made with hemp, some of these manufactures include Nike, Converse, Armani, Patagonia, Polo Ralph Lauren, Oscar de la Renta and many more (soiferman). Recently a pro cotton organization posted some disturbing facts regarding the growing and production of cotton products. A staff member at Lotus organics was quoted as saying; The simple act of conventionally growing and harvesting the one pound of cotton fiber needed to make a T-shirt takes an enormous and devastating toll on the earth’s air, water, and soil that impacts global health. Also, policies and practices within the cotton industry from crop subsidies to garment sweatshops create poverty and misery that stretch around the world. Cotton industry trade organizations such as Cotton Incorporated spend millions and millions of dollars attempting to convince American consumers of the hoax that conventional chemical cotton is pure and friendly to the health of the wearer (lotusorganics). It is of utmost importance that information detailing both the pros and cons of each crop be examined prior to the making of decisions regarding the crops futures. When taking into account the advantages of any new technology it is important to understand all facts surrounding both sides of an issue to prevent misconceptions. Tetrahydrocannabinol, also known as THC, and other cannabiniods are found in food and other products made from fiber hemp seed. THC is the chemical element which gives Marijuana its analgesic effects. The government’s stance on THC is clearly defined within the controlled substances (CSA) act of 1970, and it is the job of Americas Drug Enforcement Agency, or DEA, to assure no products containing THC are sold for human consumption in the United States. When congress wrote the CSA in 1970, it provided anything that contains â€Å"any quantity† of a schedule 1 hallucinogenic controlled substance is, itself a Schedule 1 controlled substance, unless it is an FDA-approved drug product. Thus, the CSA prohibits human consumption of any non-FDA-approved product that contains any amount of THC. Today’s rule s reiterate this long-standing aspect of federal law (usdoj). Since THC and the over 60 other cannabiniods are fat-soluble, i.e., store themselves in the fatty tissues of the brain and body, even a very small amount may be damaging, especially if ingested regularly (mcdougal). At this time the basis of arguments for the legalization of industrialized hemp in the United States have nothing to do with promoting consumption of hemp products. First and foremost it is imperative that we not rule out the many possible attributes of this ancient plant simply because a select group of individuals want to get high. Hemp is in fact a member of the Cannabis Sativa family of plants; however, the THC content in industrialized hemp is so minute it would be virtually impossible to get high by consuming or smoking the plant. Industrialized hemp has a THC content between 0.05% and 1%. Marijuana has a THC content of 3% to 20%. To receive a standard psychoactive dose would require a person to power smoke 10-12 hemp cigarettes over a matter of minutes. The large volume and high temperature of vapor, gas, and smoke would be almost impossible for a person to stand (worrell). Under current legislation citizens across America are being held to a grievous double standard. It is currently illegal to grow industrial hemp for food, oil, paper or fabric in the united states of America, but it is perfectly legal to export hemp to the united states and to process, consume and wear it there (soiferman). Last year, Canadian farmers planted 48,060 acres of hemp. Government statistics say Manitoba and Saskatchewan, the provinces along North Dakotas northern border, were Canadas biggest hemp producers (Wetzel). The United States current policy does not pass any logic test. Why is it our government thus far has been unable to move past the stereotypes, and offer the American public the same opportunities we give to the countries exporting hemp into America? By moving past the stereotypes and giving serious consideration to the legalization of industrialized hemp, America now has an opportunity to become an active participant in the saving of forests and reducing pollution. Through the use of hemp, we as a society could again be credited with advanced thought, and ingenuity which is after all just a few of the many attributes which distinguish each of us as Americans in the first place. Listed in the body of this letter are but a few of the many contributions industrialized hemp could offer our country, and I am confident hemp could if given the chance, surprise us all with more contributions to our economy and environment. To refuse the many possibilities hemp could offer would not only be a huge step in the wrong direction, but years down the road such a decision would be likened to the stance America once held on the futile possibilities of recycling garbage. . Works cited â€Å"Cotton: From Field to Fashion Facts Behind the Fiber†. , Oct 2005 Lotusorganics.com, . â€Å"DEA Issues Final Rules On Cannabis Products†. Mar 2003.Usdoj.gov, . McDougal, Jeanette. MM, CCDP, Chair Aug 2000. â€Å"Cannabis Hemp THC in the food supply† Hemp committee, Drug Watch Intl. Drugwatch.org, . Soiferman, Ezra. Sept 2005. â€Å"Hemp Facts† Hempfarm.org, . Wetzel, Dale. â€Å"Lawmaker Holds Hope in Hemp.† State Legislatures Mar. 2007: 37. Research Library Core. ProQuest. 8 Mar 2007. . Worrell, E., Phylipsen, D., Einstein, D., Martin, N. Apr. 2000. â€Å"Energy Use and Energy Intensity of the US Chemical Industry.† Ernest Orlando Lawrence Berkeley National Laboratory. NAIHC.org, . Research Papers on Legalization of Industrialized Hemp - Science EssayGenetic EngineeringTwilight of the UAWThe Effects of Illegal ImmigrationPETSTEL analysis of IndiaDefinition of Export QuotasCapital PunishmentRelationship between Media Coverage and Social andOpen Architechture a white paperIncorporating Risk and Uncertainty Factor in CapitalBionic Assembly System: A New Concept of Self

Parents Play a Critical Role in Education

Parents Play a Critical Role in Education While parents have always had a role in their children’s education, there is a growing body of research today that confirms their critical role in helping both teachers and students succeed academically. Parental Engagement Starts Early The parent-school relationship is one that should begin early, a fact recognized by both the U.S. Departments of Health and Human Services (HHS) and Education (ED). In May 2016,  these departments issued a joint  Policy Statement on Family Engagement from the Early Years to the Early Grades  to recognize the critical role of parents in promoting children’s success starting in early childhood systems and programs: Strong family engagement in early childhood systems and programs is central- not supplemental- to promoting children’s healthy intellectual, physical, and social-emotional development; preparing children for school; and supporting academic achievement in elementary school and beyond. The policy statement reiterated the findings in an earlier report,  A New Wave of Evidence,  from the Southwest Educational Development Laboratory (2002). This report remains the most comprehensive meta-analysis using 51 studies on parent engagement and student academic success. The report released the statement: â€Å"When schools, families, and community groups work together to support learning, children tend to do better in school, stay in school longer, and like school more.† The  reviewers  considered backgrounds and income and included studies covering all grades, all regions of the country,  diverse populations along with a variety of methods, both quantitative and qualitative. The conclusion reached was that that parent engagement led to: Higher grades and test scores, and enroll in higher-level programsIncrease in earned credits and promotions.Improved attendanceImproved behavior and social skillsIncrease in enrollment in postsecondary education Increasing parent engagement in order to achieve these outcomes means schools are seeking ways to connect parents to school communities. What Parents Think A report commissioned by Learning Heroes and supported by the Carnegie Corporation called  Unleashing Their Power Potential  details why communication can help. The data for the report came from a survey that focused on the â€Å"perceptions of schools and the state and national assessment data.† More than 1,400 K–8 public school parents across the nation took part. The survey co-collaborators included Univision Communications, National PTA, National Urban League, and the United Negro College Fund. The findings from  Unleashing Their Power Potential  may hold one big surprise for educators; elementary school parents place more emphasis on their child’s happiness than academics. Putting happiness first, however, shifts in the middle school years as parents develop doubts about their children’s preparedness for postsecondary schools. One primary area  for  concern in the survey found parents are confused on how to understand the different ways students are accessed: â€Å"[M]ost of the communications parents receive- report cards, annual state test score reports, and curriculum summaries to name a few- are indecipherable and incomprehensible for most parents. About a quarter of parents are not aware of their childs annual state test scores.† The authors of the report suggest  there is a need for improved communications â€Å"that are responsive to parents needs, interests, and concerns.† They note, â€Å"Most parents rely on report card grades, quizzes, and communications with teachers to determine whether their child is achieving their grade level.† They promote helping parents to understand the connection between these forms of assessment. That sentiment was echoed by Claudia Barwell, Director of Learning, Suklaa, with her essay,  How Parents Can Change the Global Landscape of Education  in which she discusses the challenges in finding the right balance in communicating with parents. Her essay, written from a parent’s point of view, suggests that there are three fundamental areas for balance: the teacher’s relationship with parents, parents’ relationship with formal assessment, and the latent power of parents in co-designing schooling. She suggests that schools survey parents and ask these key questions: What values do you believe are essential for a developing child?What part of the current curriculum is essential?What should we be teaching that we are not?What skills will they need for the future?What role would you like to play in the education of your children? Such questions can begin a dialogue and improve the conversations between parents and teachers and administrators. Barwell would also see value in seeing â€Å"links to brief teaching methods and a glossary of terms so that parents can support learning at home without being told we are ‘doing it wrong’ by our children.† Barwell’s request for links illustrates an audience willing to use a growing number of technology tools designed for parents to understand how a school operates. There are also technology tools designed to help parents interact with the teachers and administrators. How Parents Interact With Schools If parents are looking for an explanation with details of what their child is expected to learn over the course of  a week, month or year, there are multiple options schools may be using, from software platforms to mobile apps.   For example, SeeSaw or  ClassDojo, used in preschool and elementary grades, are software programs that can document and share information about student learning in real time. For the upper elementary grades, middle and high school, the platform  Edmodo  allows parents to see assignments and class resources, while Google Classroom provides teachers a means to send out parent/guardian updates. All of this software offer mobile apps as well. Because evaluation programs for teachers, support staff, and administrators include  a parent communication/engagement goal, a need exists to measure communication and engagement, and these technology tools collect that data. For this reason,  many schools districts encourage parents to sign up for the mobile app  Remind. This app can be used by a teacher to send homework updates or by a school district to send general school updates through text messages. Finally, most public schools now post student grades online through student-management software such as  PowerSchool, Blackboard,  Engrade,  LearnBoost, or  ThinkWave.  Teachers can post student performance ratings (grades) which let parents keep a watchful on student academic progress. Of course, the amount of information available through these kinds of technology can be a little overwhelming. Technology tools designed to increase parent engagement are only effective if they are used by the parents. School districts need to consider how they will educate parents to use different technology tools to guide their decisions.  But it is not only in the area of technology that parents need training.   Research findings report that most parents do not understand educational policy at the local, state or federal level. To correct these gaps, the  Every Students Succeed Act (ESSA), an educational reform plan that replaced the No Child Left Behind Act (NCLB) in 2015, places an  emphasis on the importance of stakeholder engagement. There are mandates for community input; states  must  solicit and evaluate input from parents when developing strategic plans for schools. Finally, while teachers need to keep parents â€Å"in the loop† they also need to respect the limited time today’s parents find themselves, stretched for time, energy, and resources. Home and School Connection Technology and legislation aside, the are other ways parents can be supportive of education in general, and they have been around almost as long as the institution of public education. As early as 1910, a book on education by Chauncey P. Colegrove titled The Teacher and the School placed an emphasis on engaging parents. He advised teachers to â€Å"enlist the interest of parents and secure their co-operation by making them acquainted with what the schools are striving to accomplish.† In his book, Colegrove asked, â€Å"Where there is no knowledge of each other, how can there be close sympathy and cooperation between parents and teacher?† He responded to this question  by stating, â€Å"The surest way to win a parents heart is to show an intelligent and sympathetic interest in the welfare of his children.† Over 100 years after Colegrove published  The Teacher and the School,  Secretary of Education (2009-2015)  Arne Duncan  adds, â€Å"We often talk about parents being partners in education. When we say that, were usually talking about the healthy and productive relationships that can develop between the adults in a childs life at home and the adults who work with that child at school. I cant overstate how important this partnership is.† Whether it is a handwritten note or a  text message, the communication between teachers and parents with parents is what develops the relationships described by Duncan. While a student’s education may take place within the walls of a building, the school’s connection to parents can extend those walls far into the student’s home.

Women and the MBA

Women and the MBA Men vs. Women in Business School Whether you are a man or a woman, business school can help you achieve your career goals. An MBA can open doors that you never knew existed.  Currently, almost half of the people who take the GMAT are of the female persuasion. Unfortunately, women only account for 30% of enrollment in MBA programs. Though this is a significant increase over the last 25 to 30 years, it still proves that there is an imbalance within the world of MBAs. This imbalance has led to new and more enthusiastic recruiting methods. Graduate business schools are constantly seeking more qualified female applicants and have become more aggressive in their attempts. They have even begun to adapt their programs and clubs to make them more appealing to business women. Why Women Should Enroll in MBA Programs When you earn an MBA degree, it opens up doors all over the business world. An MBA is extremely versatile and will be valuable to you no matter what industry you decide to enter. MBAs work in both large and small corporations, non profit organizations, health care fields, government establishments, and many other types of business settings. Many MBA graduates have also utilized their degree to start their own business. An MBA will give you a general management education and increase your chances of moving into senior-level positions. An MBA degree can also help the pocketbook. MBA graduates are often the highest paid employees within the US. Why More Women Dont Enroll in MBA Programs When surveyed, most female MBA graduates have positive things to say about their business school experience. So, why don’t more women enroll? Here are the most common complaints and misconceptions: Many women mistakenly perceive business school as a place where they will not be welcome by the male-dominated population.There are not enough women role models and business leaders.There are not enough female professors. The faculty is often male-dominated.MBA programs are inflexible and/or not compatible with personal goals. Choosing a Business School Before choosing a business school, make sure that you consider both the learning environment and the campus culture. You will find that some business schools are more supportive of female students than others. To learn more about the school, try talking to the admissions office, current students, and alumni. Some schools are so eager to acquire more women candidates that they offer special scholarships and financial aid programs to female candidates. Make sure that you evaluate all of the options before making a decision. Scholarship Resources for Women Many schools have scholarship opportunities that they make available to women applicants. Women can also pursue scholarships that are offered by these professional womens organizations: C200American Business Women’s Association (ABWA)Business Professional Women (BPW Foundation) ​Online Resources for Women There are many different resources available to women who are interested in pursuing an MBA. Here is just an example: National Association for Female Executives (NAFE)CatalystForte FoundationWomen for Hire

Boiler Room Directed by Ben Younger Essay Example | Topics and Well Written Essays - 1000 words

Boiler Room Directed by Ben Younger - Essay Example Upon entering JT Marlin’s offices that served as the short time brokerage firm in the New York’s outskirts, Seth meets cameo performances from Jay (Specogna 85). This performance gives him the resolution to pursue money with more vigor. His driving forces include the fractured relationship he had with his father and the love interests he began showing on Abbie. These two factors give him more motivation. His initial excellence further gives him the courage to sell and pursue the high commission. However, a few contacts in his business dealings start questioning the legitimacy of many firms. His latest stand only highlights strained association with his father. It also highlights the deterioration of morality in society (Specogna 85). Issues of morality are evident in the movie when Seth, who is a morally upright student, not only drops out of college but also disagrees with his harsh father. It is unfortunate that his father, who was a federal judge, considers him illeg itimate instead of supporting him through his college education. Ben Younger portrays the father as morally lacking. When Seth gets a stockbroker’s job, he puts in a lot of determination and hard work in his endeavors to be successful. However, things assume a worse turn when Seth discovers that the job he was doing failed to serve its purpose (Specogna 48). The director of this movie portrays Seth as a college student with high aspirations even after dropping from Queens College. He decides to operate a casino from his rented apartment as a source of revenue. However, this casino fails to meet Seth’s father’s expectations. As an obedient son, Seth considers either an approval or disapproval of his stern and adjudicating father very important. As a way of obeying the wishes of his father, Seth drops his casino business and decides to pursue a career in stock brokerage. He learns this idea from J.T Martin. Although he joined as a junior associate, he soon learned the idea of doing sales over the phone craft. His hard work and resilience nature soon earn him a senior broker’s position upon obtaining Series 7 license. He exudes success in his sales career and even registers for training that makes his earnings increase upon completion. However, he later learns that J.T Marlin’s earnings are excessively higher when compared with the average. This makes him develop suspicions for the business practices conducted by J.T Marlin. At this point, Seth realized that his entry into this sales profession was only to please his father. The reality was that he was in a wrong profession and was disappointed. This illustrates the immorality of choices. Parents who force their children into professions that they do not like are only acting immoral (Specogna 89). Legal and ethical conflicts of the movie Many opportunists in the society today would seek to take advantage of other persons especially the weak. The Boiler room movie illustrates thi s situation of the society through its several scenarios. The morality and ethical concepts within society are neglected in the movie in pursuit of status and profits. Seth Davis draws attention from the boiler room. Although he runs a successful gambling operation in his apartment, ethical issues of the business are highlighted as evident in the tender ages of clients. Besides, his father, who is a federal judge, feels embarrassed by his son’s choice of career.  Ã‚  

Business Function Essay Example | Topics and Well Written Essays - 1500 words - 1

Business Function - Essay Example In the second category, the enterprise is not registered with the relevant authority as a business. It comprises two types of ventures: This is the oldest, most common, and most basic business type. As the name suggests, this type of enterprise is owned and managed by one person, who is in charge of all operations conducted on behalf of the business. Since it is the easiest to start, it manifests in form of small retailers and utilities like beauty services, photographers, repairs and maintenance, transport, cleaning, etc (Akdeniz, 2013:16). This type of business is inexpensive to start and, as a result, is often supported by the founder’s savings until growth necessitates external funding. In its simplest form, a partnership resembles a sole trader, with the only difference occurring in the sharing of ownership (Gevurtz, 2014:21). All partnerships should have partnership agreements that explain the rights and responsibilities of the various partners involved. In light of this, there are different types of partners, who are all covered by the partnership agreement. For example, there may be dormant, â€Å"sleeping,† or quasi partners, who own a share of the enterprise but are not actively involved in its management (Cornell, 2013:36). Partnerships have unlimited liability, and are common in careers like accountancy, dentistry, medical practice, law, etc. Starting in 2001, there has been a new type of partnership known as a limited liability partnership. This is like a hybrid of a partnership and a limited company, since it has limited liability (like all limited companies) but must be owned by not less than two members (making it a partnership). Limited liability partnerships, also known as LLPs, are formed to aid professional partnerships among doctors, dentists, lawyers, accountants, and others, who are barred from forming limited companies because of constraints imposed by their professional

Arabic News Channels Essay Example | Topics and Well Written Essays - 1000 words

Arabic News Channels - Essay Example "They're challenging the hegemony of the American media." Al Jazeera broadcasts 24/7, and is becoming increasingly present and important throughout the Arab world. It is Qatar-based and reaches out to over 45 million people that live in Arab nations. It also was the center of controversies during the Iraqi War. The first controversy accused Al Jazeera for broadcasting views of the conflict going on that were very different than media and news stations that resided in the United States (Sharkey, 2003). According to Sharkey (2003, pg. 1),"While U.S. television news media focused on military operations, Al Jazeera was "presenting something of the violence, the effects, the emotion" of the conflict, says Leila Hudson, assistant professor of Near Eastern studies at the University of Arizona, who monitored war news on U.S. and Arab networks. This led to charges by U.S. officials and conservative commentators that Al Jazeera was airing propaganda. Untrue, says Lamis Andoni, a journalist who has worked for print and broadcast media in the Middle East and the United States. Al Jazeera broadcast statements from U.S. government officials, showed the Central Command briefings and had a reporter embedded with U.S. troops, Andoni says. The network showed "a broader picture" of the conflict than U.S. news organizations, she says, because it also showed civilian casualties and the destruction of water, electrical and hospital facilities." Skeptics believe that neither Al Jazeera nor the United States demonstrated an accurate portrayal of the war in Iraq. They failed to analyze it properly, including the causes and reactions to it. People are concerned that Arab satellite stations are too busy broadcasting the prospective of the Iraqis without pretending to be objective, and that this in turn harms their own audience (Sharkey, 2003). According to Sharkey (2003, pg. 1), "Media analysts say television news operations in the Arab world and the United States would never present events or issues from the same perspective, because they are trying to reach audiences with different cultural experiences and frameworks. The fact that Al Jazeera offers "a different perspective than CNN" should not be regarded as a problem, says Mohammed el-Nawawy, a Stonehill College professor who has written about coverage of the Middle East. "Each network is trying to appeal to its audience." U.S. network executives say the different perspectives offered by Al Jazeera and other Arabic-language networks are valuable in their deliberations about how to cover events in the Arab world." News media stations in the United States keep a watch on Al Jazeera 24/7. He says this is done to remind them how other people in the world perceive the same news and stories. Believe it or not, Al Jazeera works with CNN and other United States networks. The same sort of scenario is present in the Arabic world. Footage from both sides could be seen on television for each area of the world. According to Sharkey (2003, pg. 1), "Although U.S. government spokespersons have disparaged Al Jazeera's coverage, it has been an intelligence tool for the United State

Communicating Total Rewards Essay Example | Topics and Well Written Essays - 500 words

Communicating Total Rewards - Essay Example The desired information concerning total rewards, benefits and compensation to the prospective employees of One Click Marketing Company will be communicated by use of the internet, television sets, radios and newspapers will be employed in delivering the message to the desired audience (Kaplan 2007). For instance, television and Radio advertisements will be mostly aired before and after most preferred programs, by many viewers and listeners. Also, newspapers and magazines with wide coverage will be utilized in targeting and delivering the message to the desired audience. DeliverablesThe preferred form of deliverable selected for the project is total rewards statement. Total rewards statement was selected basing on the deliverables ability to capture the desired information being expected by prospective.   Total reward statement provides satisfaction to the prospective employees by recognizing their contribution towards the organization, through provision of equitable compensations as well as being recognized during organization’s decision making process.   Delivery of the information regarding total rewards to prospective employees will be carried out by the sales’ and marketing department, in conjunction with human resource department. The two departments will have to liaise with one another so as to deliver quality information regarding total rewards to prospective employees at the right time.The total rewards information about One click Marketing Company will be communicated to prospective employees.

Monetary Control Coursework Example | Topics and Well Written Essays - 250 words

Monetary Control - Coursework Example It is very interesting to note that a bank losses money when a loan is repaid. The currency is destroyed and disappears from the economy entirely. Open Market Operations are one of the primary tools that the Federal Reserve employs to accomplish its monetary policy objectives (Axilrod, n.d.). They entail the acquiring and selling of government securities. The Federal Reserve has no power to choose whom it engages in business activities. The primary dealers operate on a price basis to gain access to the open market operations. Open Market Operations facilitate the Federal Reserve to influence the supply the reserve balances in the banking system. The effect is on short-term interest rates to spread to other monetary policy targets (Axilrod, n.d.). Open Market Operations allow central banks the flexibility to manage the volume of financial operations on their initiative. The domestic trading desk of the Federal Bank of New York under the supervision of the Federal Open Market Committee conducts open market transactions (Axilrod, n.d.). The federal funds rate does respond to changes in demand for and supply of the reserves in the banking system. It, therefore, shows a good sign of the existence of credit in an

Genesis Essay Example | Topics and Well Written Essays - 750 words

Genesis - Essay Example First, man was made in the image of God as a proof that God has the ability to make decisions. This characteristic can also be seen in humans, as they have the ability to make decisions. This is an exceptional characteristic that is evident in humans. On one hand, humans have the freewill to make decisions, without any obligation from other animals. However, all the other creatures on the earth surface do not have such characteristics, as they are bound by nature. Similarly, creation of man in the image of God enhances the creativity of the Supreme Being. Humans have the ability to be creative in a number of aspects. Apparently, this aspect gave humans control over other creatures on the surface of the earth, since they lack such a character. In addition to this, humans have the mental and social capability, which is enhanced through speech. When looking at the book of Genesis, God communicated through speech. Since the word of God was immensely powerful, all the creation was made th rough spoken words. Ultimately, God gave man the ability to speak. This shows common characteristics in man and God. Making man in the image of God redeems human beings from the animal world. According to the story of creation, God is in ultimate control of all creation2. He has control over all activities, animals, plants and any other creation. However, after creating man in his image, God gave man control over the other creatures on the earth’s surface3. In essence, man was instated as the supreme control over all the creation on earth. This shows that God gave man the power to take care of all the creation, which is in resemblance of His character. Man was created in the image of God, which denotes the righteousness and innocence of God. As a fact, God is holy and supreme being with a moral compass. Initially, Adam was created as â€Å"very

Monetary Control Coursework Example | Topics and Well Written Essays - 250 words

Monetary Control - Coursework Example It is very interesting to note that a bank losses money when a loan is repaid. The currency is destroyed and disappears from the economy entirely. Open Market Operations are one of the primary tools that the Federal Reserve employs to accomplish its monetary policy objectives (Axilrod, n.d.). They entail the acquiring and selling of government securities. The Federal Reserve has no power to choose whom it engages in business activities. The primary dealers operate on a price basis to gain access to the open market operations. Open Market Operations facilitate the Federal Reserve to influence the supply the reserve balances in the banking system. The effect is on short-term interest rates to spread to other monetary policy targets (Axilrod, n.d.). Open Market Operations allow central banks the flexibility to manage the volume of financial operations on their initiative. The domestic trading desk of the Federal Bank of New York under the supervision of the Federal Open Market Committee conducts open market transactions (Axilrod, n.d.). The federal funds rate does respond to changes in demand for and supply of the reserves in the banking system. It, therefore, shows a good sign of the existence of credit in an

Critical Perspectives on Management and Organisations Essay - 2

Critical Perspectives on Management and Organisations - Essay Example It is also common that older people happen to be steadfast in their habits and have consistency in many things because of their firm beliefs and ideas. They are usually not flexible, and their temperaments are not adaptable for the changing situations and in most of the cases they are not creative (Merriam Webster, 2015). Financial burden on people is increasing continuously and women have to work with their male counterparts to earn a living. If women are not given their due share of jobs that are available in the market, if they are not given promotions in their organizations or if they are expelled on the basis of their gender; this sexism can give rise to a number of social and economic issues. The financial situation of country has much to do with the other fields and areas of the country. The whole social, cultural, industrial, technological, even religious and spiritual prospects of the collective community and personal lives of people get affected (Nauert, 2010). When females do not get jobs because they are women, they face many psychological issues. These issues may get aggravated with the passage of time alongwith the perceptions of women regarding the prevailing gender equality in society change. This may create a kind of psyche in which they consider themselves victimized and in turn they start feeling alienated and they start taking themselves in society whose self-esteem is not considered important and their sense of insecurity is developed. They may experience anxiety and undue pressure because of the society which regards males to be professionally strong in comparison to females. A male-dominant environment can get evolved which can have a profound impact on the society. The problems raised by such issues have exerted a profound impact on the society and feminist movements are a reflection of this fact.

Coincidence of Cycles in Credit and Property Markets

Coincidence of Cycles in Credit and Property Markets Abstract What caused the financial crisis that is sweeping across the world? What is the role of debt and leverage in causing asset market bubbles to form and collapse? What keeps asset prices and lending depressed? What can be done to remedy matters? This paper will present a qualitative review of the role of debt and leverage in causing asset market bubbles to form and collapse in the real estate market under the context of the global financial crisis. Long-run causality appears to go from property prices to bank lending. Literature Review The direction of causality between bank lending and property prices The causality between bank lending and property prices goes in both directions. Property prices may affect bank lending via various wealth effects (Hofmann, 2003). First, due to financial market imperfections, households and firms may be borrowing constrained. As a result, households and firms can only borrow when they offer collateral, so that their borrowing capacity is a function of their collateralisable net worth. Since property is commonly used as collateral, property prices are therefore an important determinant of the private sectors borrowing capacity. Second, a change in property prices may have a significant effect on consumers perceived lifetime wealth, inducing them to change their spending and borrowing plans and thus their credit demand in order to smooth consumption over the life cycle. Finally, property prices affect the value of bank capital, both directly to the extent that banks own assets, and indirectly by affecting the value of loans secured by property. Proper ty prices therefore influence the risk-taking capacity of banks and thus their willingness to extend loans. The literature in the last few decades referred to risk-taking behavior of financial market participants in times of abundant liquidity, banks leverage targeting behavior and a portfolio real balance effect of other financial intermediaries. Financial intermediaries, which must maintain an adequate ratio of capital to assets, can be deterred from lending, or induced to shift the composition of loans away from bank-dependent sectors such as small businesses, by declines in the values of the assets they hold (Bernanke Gertler, 2000). Bank lending, on the other hand, may affect property prices through various liquidity effects. The price of property can be seen as an asset price, which is determined by the discounted future stream of property returns. An increase in the availability of credit may lower interest rates and stimulate current and future expected economic activity. As a result, property prices may rise because of higher expected returns on property and a lower discount factor. Property can also be seen as a durable good in temporarily fixed supply. An increase in the availability of credit may increase the demand for housing if households are borrowing constrained. With supply temporarily fixed because of the time it takes to construct new housing units, this increase in demand will be reflected in higher property prices. This potential two-way causality between bank lending and property prices may give rise to mutually reinforcing cycles in credit and property markets. A rise in property prices, caused by more optimistic expectations about future economic prospects, raises the borrowing capacity of firms and households by increasing the value of collateral. Part of the additional available credit may also be used to purchase property, pushing up property prices even further, so that a self-reinforcing process may evolve. Potential simultaneity problems are controlled for the direction of causality between bank lending and property prices, as studied by Gerlach and Peng (2002). Bank lending, which was transformed into real terms by deflation with the CPI (consumer price index), is defined as total credit to the private non-bank sector. Cross-country comparisons of the development of bank lending are flawed by differences in the definition of total credit across countries. These differences in definition will be reflected in the results of the empirical analysis. Differences exist, for example, with respect to the treatment of non-performing loans (NPLs) in national credit aggregates. A drop in property prices will on the one hand have a negative effect on the extension of new loans. On the other hand, it will give rise to an increase in NPLs. The estimated effect of property prices on bank lending will therefore depend on whether banks are forced to write off NPLs quickly or not. For instance, Japan and the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) experienced severe banking crises in the late 1980s or early 1990s, which were preceded by a collapse in property prices. While NPLs were quite quickly cleansed from banks balance sheets in the Nordic countries, this was not the case in Japan. To a broader view, bank lending has contributed significantly to the real estate bubble in Asia prior to the 1997 East Asian crisis. Quarterly residential property price indices were available for all countries except for Japan, Italy and Germany. For Japan and Italy, semi-annual indices were transformed to quarterly frequency by linear interpolation. For Germany, a quarterly series was generated by linear interpolation based on annual observations from the first quarter of each year. In order to obtain a measure of real property prices, nominal property prices were deflated with the CPI. Residential property prices may not fully capture the property price developments, which are relevant for aggregate bank lending. Credit aggregates comprise bank lending to households and enterprises. The appropriate measure of property prices for the empirical analysis would therefore be aggregate property price index, comprising both residential and commercial property prices. For most countries, the available commercial property price data are available only in annual frequency and represent only price developments in the largest urban area of the country. The use of these data in empirical analysis is therefore quite problematic. In the few countries where high quality commercial property price data are available, such as Japan, Hong Kong and Singapore, residential and commercial property prices are closely correlated, suggesting that residential property prices may act as a proxy for omitted commercial property prices in the empirical analysis. The short-term real interest rate is measured as the three months interbank money market rate less four quarter CPI inflation. The short-term real money market rate serves as a proxy for real aggregate financing costs. A more accurate measure would be an aggregate lending rate. Representative lending rates are, however, not available for most countries. Empirical evidence suggests that lending rates are tied to money market rates, implying that money market rates are a valid approximation of financing costs. The global financial crisis and debt explosions A chain of events, beginning with unexpected losses in the U.S. subprime mortgage market, was destined to bring the global financial system close to collapse and to drag the world economy into recession. In the aftermath of the Global Financial Crisis between 2007 and 2009, economists have paid more attention to the role of debt and leverage in causing asset market bubbles to form and collapse. For instance, the asset price inflation and rising leverage for the United States exemplified nearly all the signs of a country on the verge of a financial crisis-indeed, a severe one. Then, we find that asset market collapses are deep and prolonged. Obviously, the transparent global banking system shows that the main cause of debt explosions is not the broadly critically valued costs of bailing out and recapitalizing. In essence, the crucial drivers of debt increases are the inevitable collapse in tax revenues that governments suffer in the wake of deep and prolonged output contractions, as well as often-ambitious countercyclical fiscal policies aimed at mitigating the downturn. Firms private investment and asset market valuation are negatively associated with their top lenders real estate exposure. Global firms have a flexible average and they can get the leverage market, so there is an opportunistic approach about it. The characteristic huge buildups in government debt are driven mainly by sharp falloffs in tax revenue and, in many scenarios, big surges in government spending to fight the recession, declared by Reinhard and Rogoff (2008). The rise in real government debt in the three years follows a banking crisis, tending to explode with a rise at an average of 86% in the major post-World II episodes (Reinhard and Rogoff, 2008). Using the money amount of borrowing from the banks is the amount of credit available to the firm. Lang, Ofek, and Stulz (1996) find that future growth and investment are negatively related to leverage, especially for real estate firms with high debt ratios. In the current economic background, the effects of firms collateral losses may also depend on firm leverage, with highly leveraged firms investing less owning to more binding borrowing constraints. Hofmann (2003) suggests that property price cycles, reflecting changing beliefs about future economic prospects, drive credit cycles, rather than excessive bank lending being the cause of property price bubbles. Most asset classes have derivative markets. Professional investors assume that property derivatives market worked property, and the deleveraged REIT returns are closely linked to underlying market. Real estate invest in real estate debt (in effect deleveraging), use derivative trades for liquidity or use long-short trading to take positions on market views, and need to buy real estate at all. Purchaser gets low cost, diversified returns without alpha. Seller hedges underlying assets or reinvests cashflow. If there are some products that allow them to invest to increase the house price, then the investors can hedge against the increase of the house price and build up my investment. The investors could track the increase of the house prices and reduce the exposure of the house. They can diversify in the portfolio. A derivative market will give you pricing information for the pricing symmetry. The U.S. real estate is strongly distorted by derivatives and arbitrage argued by Schiller. The global financial crisis and leverage: worsening the impact of collateral losses and borrowing The factors that determine the leverage level are: financial covenants, property market/cycle, income to repayment ratio, sum of deals, maintain credit rating, dividend policy, competitor debt levels, tax benefits, and other factors. They are weighted from the largest proportion to the smallest proportion respectively. Leverage does hurt growth in the sense that it worsens the impact of collateral losses. Figure 1 explores the impact of a lower steady-state leverage ratio, 25% instead of 50% as in the baseline scenario. The figure shows that a reduction in leverage significantly moderates the cycle. Figure 1. The effects of leverage on responses to an asset-price boom and bust Notes: Comparison of high steady-state leverage (ratio of net worth to capital of 0.5, as in baseline simulations) and low steady-state leverage (net worth-capital ratio of 0.75). Monetary policy is assumed to target expected inflation aggressively. For example, firms or households may use assets they hold as collateral when borrowing, in order to ameliorate information and incentive problems that would otherwise interfere with credit extension. Under such circumstances, a decline in asset values (for example, a fall in home equity values) reduced available collateral, leads to an unplanned increase in leverage on the part of borrowers, and impedes potential borrowers access to credit. Supportive of the bubble-size hypothesis shows that the greater the gain prior to the shock between 1986 and 1989, the greater the fall in the post-shock period. Leverage is significantly positive, probably suggesting that firms that can secure borrowing are better firms and those with better relationships (Gan, 2007). Lamont and Stein (1999) show that house prices into metro areas with high levels of leverage are more sensitive to income shocks than house prices in metro areas with less leverage. At an individual level, Genesove and Mayer (2001) show that leverage has a large impact on seller reservation prices in a downturn, affecting both the probability of sale and the subsequent sales prices. Others have shown that liquidity affects refinancing behavior and mobility. While Case and Shiller (1988) use surveys to show that market conditions affect the reported expectations of recent home buyers, few papers have explored the role of information and psychology on expectations formations and transactions prices. Leverage drives up volatility of returns and bad timing issues, and LTV based lending is highly risky with the characteristics of being both pro-cyclical and vulnerable to downturns. Income/earning based constraints are more robust, and NB debt maturity, downside risk and refinancing risk are both crucially important for the leverage performance. Non-contractibility imposes limits on borrowing: and debt contracts secured on land are the only financial instruments that creditors can rely on (Miller and Stiglitz, 2010). This puts a strict upper limit on the amount of external finance that can be raised: so the rate of expansion of the small businesses is determined not by their inherent earning power but by their ability to acquire collateral. Even without intermediaries, a credit-constrained market economy-where collateral is used to handle repudiation risk-can exhibit liquidity crises and asset price crashes (Geanakoplos, 2003). Highly leveraged borrowers can very easily become insolvent. Giacomini et al. (2015) show highly leveraged REITs produce lower average returns and lower Sharpe ratios over cycle and much greater falls in bear markets. Leverage is producing the worst risk adjusted return. If their net worth were only 5% of assets held as collateral for loans, a correction of asset prices in excess of this would be enough to wipe out their net worth-even before fire-sales begin. As Koo (2011) describes it, the collapse of an economy-wide asset bubble could be the economic equivalent of the collapse of a supernova-with the black hole of insolvency threatening to swallow whole sectors of an over-leveraged economy. The consequences of technical insolvency were seen as so severe, indeed, that a preemptive strategy of concealing the true balance sheet position was apparently in Japan (Koo, 2011). As lending is liberalized and leveraged increased at the same time that prices are inflated (as the result, in p art, of banks capital reserves growth), moral hazard further undermines lenders incentives to price loans efficiently and exacerbate these underlying forces for the provision of excessive credit (Herring and Wachter 1999). The impact of leverage (recall irrelevance proposition-but also costs of financial distress and no tax shield for REITs) is dependent upon market perception of management ability, and CAPM (or factor models) can be used to assess the risk premium. The study covers the short-term and long-term dynamics of the assets, correcting for leverage in the direct real estate indices. Results suggest that long-run REIT market performance is more closely related to the direct real estate market than to general stocks, similar response to shocks in fundamentals. Asset market features that hamper arbitrage processes The inefficiencies in underlying asset market include high round trip transaction costs, illiquidity and time to trade, real management costs, and heterogeneity and alpha (the retail portfolio preference). An obvious reaction to market inefficiency is arbitrage. Arbitrage signifies taking advantage of pricing inefficiencies without any exposure to risk, and creates abnormal profits (no free lunch). When arbitrage speculators enter the market, adding liquidity, it is reasonably assumed that these are mostly short-term investors, as arbitrage investors by their nature tend to buy and sell more rapidly than most other investors. Theoretical analyses suggest expected margin should be zero or close to zero for the underlying asset markets and rational margins (arbitrage portfolio). However, in practice consumers and FI do not arbitrage in the housing market (Farlow, 2004). Arbitrage in the real estate market is risky for several reasons. First, a player has to be sure that there are enough players in the market that are also arbitraging: an insufficient proportion of arbitrageurs might cause the inefficiency to persist. The execution time is more painful for the buyers than the sellers. In any one market, there are more buyers than sellers. Second, another risk is the impossibility to obtain general agreement on the deviation from a certain fundamental value. Third, houses are heterogeneous assets that rarely have close substitutes and hence are traded in segmented markets. In addition, no central exchange exists so information is far from perfect. Furthermore, the relatively high transaction costs and the absence of short-selling opportunities in housing markets make arbitrage even riskier (Hong and Stein, 2003; Farlow, 2004). Money illusion in real estate implies the failure of consumers to evaluate alternatives during a period of inflation due to a difference between nominal and real values. It plays an important role in real estate because it generally deals with long-term projects and frictions, like short-sale constraints, which makes it difficult to arbitrage mispricing away. There are several ways of the improvement of the market: the lack of liquidity, the pricing issue, the inability to arbitrage, the trench to pension funds and so on. Hence, it is better to exploit momentum in this risky market than to try to fight against it in time of excess. When the real estate portfolios lack momentum effects, they would rather have big margins. Professional investors should get rid of their retail portfolios while they are actually selling and trading. Research Methodology An iconic model with high leverage and overvalued collateral assets is used to illustrate the amplification mechanism driving asset prices to overshoot equilibrium when asset bubble bursts-threatening widespread insolvency and what Richard Koo calls a balance sheet recession (Miller Stiglitz, 2010). For the purpose at hand-to study the dangers posed by excessive leverage and how capital restructuring may be needed to avert economic collapse when an asset bubble bursts-we make use of a stripped-down framework of heterogeneous agents with explicit credit constraints but no intermediaries (Miller Stiglitz, 2010). Before considering what happens when an asset bubble collapses globally, consider how things evolve with perfect foresight, starting with small businesses that borrow up to the hilt and happily postpone consumption of traded goods to some later date. Their flow of funds accounts show land holdings, denoted evolving as: or, in symbols,  where is the amount of one-period borrowing to be repaid as (R is one plus the one-period interest rate), is price of land, and measures the productivity of land in this sector. The credit constraint, assumed to bind at all times, is that borrowing gross of interest matches the expected value of land, i.e. As the degree of leverage is keyed to expectations of future prices, there will be more lending when capital gains are in prospect-as was true for sub-prime lending according to Gorton (2008). This will be crucial when an asset bubble is considered. But with perfect foresight of future land values, substitution into (1) yields an accumulation equation for small businesses who use all their net worth to make down payments on land, namely: where the expression in parentheses on the left is the down-payment required to purchase a unit of land and the term on the right measures both the productivity of those resources in this sector and SB net worth. By adding an asset bubble to a canonical model of highly leveraged businesses, Miller and Stigliz (2010) have highlighted the vicious downward spiral that may develop when asset prices begin to fall and have outlined a variety of measures that may be used to check this-with the government stepping in because of the externalities and moral hazard involved. The authorities in both the US and UK have of course undertaken extraordinary financial interventions, amounting in total to around three quarters of GDP (Miller and Stigliz, 2010). The arbitrage scenario of the asset market bubbles Suppose in addition to the fundamentals (net rents), we define a periodic bubble component b; then any of the following form will also satisfy arbitrage conditions and be rational: , with . Thus, if at time t an asset is overvalued by an amount , a rational investor will still purchase such an asset, if the degree of overvaluation is expected to grow by a rate equal to or greater than the appropriate discount rate. In turn, this implies that a necessary condition for housing bubbles to form is serial correlation in price changes. However, to anticipate results below, in our model housing bubbles will be self-limiting because new supply is being built. Panel unit roots and co-integration tests As a tentative attempt to partly overcome this problem, I exploit the rather large cross-section dimension of my analysis to perform unit root and co-integration tests. Asa first step I perform standard augmented Dickey-Fuller (ADF) unit root tests (Dickey and Fuller, 1981) to test for the order of integration of the time series under investigation. The ADF test regression is of the form: Allowing for a maximum lag order of four, the lag order was determined by sequential t-tests eliminating all lags up to the first significant at the 5% level. The test regression for the level of each variable contained a constant and a trend; the test regression for the first difference contained only a constant. The ADF test statistic is the t-statistic of . If is significantly smaller than zero, the null hypothesis of a unit root can be rejected. I also report a panel ADF test proposed by lm et al. (2003). They show that the standardized average of the N individual ADF test statistics (6) has a standard normal distribution, where is the average of the individual ADF test statistics and and are respectively the mean and the variance of the distribution of the ADF test statistic. The appropriate mean and variance adjustment values are tabulated in Im et al. (2003). The test is one sided. The 1%, 5%, and 10% critical values are -1.96, -1.64, and -1.28. Large negative values therefore imply a rejection of the null of a unit root. On the whole, the results suggest that the natural logs of real bank lending, real property prices and real GDP are integrated of order one. This conclusion is suggested both by the individual country level tests as well as by the panel tests. The short-term interest rate appears to be a borderline case. The null of non-stationarity is rejected at least at the 10% level in seven countries out of 20 countries. The panel unit root test strongly suggests that the real interest rate is a stationary process. Given the results of the unit root tests we test in the following for the presence of a long-run relationship between real bank lending, leverage and real property prices. The level of the real interest rate is not allowed to enter the long-run relationship. The Johansen approach is based on maximum likelihood estimation of a cointegration VAR model, which can be formulated in vector error correction form: (7) where x is a vector of endogenous variables comprising the log of real bank lending, leverage and real property prices. is a vector of constants and is a vector of white noise error terms. Since I want to allow for deterministic time trends in the levels of data I leave the constant unrestricted. The rank of the matrix indicates the number of long-run relationships between the endogenous variables in the system. The cointegrating rank hypothesis for the Johansen trace test is specified as against the alternative . The lag order of the VECMs was determined based on sequential likelihood-ratio tests, eliminating all lags up to the first lag significant at the 5% level. The 1%, 5% and 10% critical values are respectively 35.65, 29.68, and 26.79 for , 20.04, 15.41, and 13.33 for for and 6.65, 3.76 and 2.69 for I also report the result of a panel cointegration trace test proposed by Larsson et al. (2001). Policy Suggestions Flexible inflation targeting Under the accommodating policy, the bubble stimulates aggregate demand, leading the economy to overheat. In contrast to the accommodative policy, the more aggressive inflation targeting policy greatly moderates the effects of the bubble. As with the case of bubble shocks, the results indicate that the policy that responds aggressively to inflation and does not target stock prices works best. Under inflation targeting monetary policy is committed to achieving a specific level of inflation in the long run, and long-run price stability is designed the overriding or primary long-run goal of policy. Inflation targeting is generally characterized by substantial openness and transparency on the part of monetary policymakers, including for example the issuance of regular reports on the inflation situation and open public discussion of policy options and plans. Regulatory initiatives to control excessive lending in real estate markets Banks have overextended their lending during periods of high asset inflation, exposing themselves to greater portfolio risks during periods of declining asset value. Bank lending to related parties, as bank owners sought to capture the gains from their speculation, has aggravated the adverse impact of speculative lending. In response, regulatory authorities have increasingly restricted lending for real estate and to related parties-as well as lending concentrated on a few borrowers. Restrictions on related lending have been difficult to implement, however, because disclosure rules are generally poor, and in Indonesia, Japan, and Thailand, banks and firms have interlinked ownership, and companies are closely held (Stiglitz and Uy, 1996). Although governments established priorities for lending-and discouraged lending for real estate and consumer goods-they still employed commercial standards. Prudential regulations, particularly capital adequacy requirements and controls on real estate lending, are essential and replicable. The adaptability of government policies-the ability to abandon policies when they fail and to change policies with changing circumstances-is clearly a lesson of general applicability, although it is hard to design institutions that capture that lesson. A monetary policy regime focuses on asset prices rather than on macroeconomic fundamentals may well be actively destabilizing. The problem is that the central bank is targeting the wrong indicator. As an alternative metric for evaluating policy responses to bubbles, Bernanke and Gertler (2000) computed the unconditional variances of output and inflation under the four different policy scenarios (accommodative versus non-accommodative on inflation, responding to stock prices versus not responding). Conclusion Over the last few years, the coincidence of cycles in credit and property markets has been widely documented and discussed in the economic policy oriented literature, In this paper, I analyse the causes of this coincidence. From a theoretical point of view, the relationship between bank lending and property prices is multifaceted. Property prices may affect credit via various wealth effects, while credit may affect property prices via various liquidity effects. Previous empirical studies were not able to disentangle the direction of causality, since the focus was usually on one of these effects bot not on both. Long-run causality appears to go from property prices to bank lending, rather than conversely. This finding suggests that property price cycles, reflecting changing beliefs about future economic prospects, drive credit cycles, rather than excessive bank lending, in the wake of financial liberalization or overly loose monetary policy, being the cause of property price bubbles. However, there is also evidence of short-run causality going in both directions, implying that a mutually reinforcing element in past boom-bust cycles in credit and property markets cannot be ruled out. References Bernanke, B. and Gertler, M., 2000. Monetary policy and asset price volatility (No. w7559). National bureau of economic research. Case, K.E. and Shiller, R.J., 1988. The behavior of home buyers in boom and post-boom markets. Farlow, A., 2004. The UK housing market: bubbles and buyers. Oriel College. Gan, J., 2007. The real effects of asset market bubbles: Loan-and firm-level evidence of a lending channel. Review of Financial Studies, 20(6), pp.1941-1973. Geanakoplos, J., 2001. Liquidity, default and crashes: Endogenous contracts in general equilibrium. Genesove, D. and Mayer, C., 2001. Loss aversion and seller behavior: Evidence from the housing market. The Quarterly Journal of Economics, 116(4), pp.1233-1260. Gerlach, S. and Peng, W., 2005. Bank lending and property prices in Hong Kong. Journal of Banking Finance, 29(2), pp.461-481. Giacomini, E., Ling, D.C. and Naranjo, A., 2015. Leverage and returns: A cross-country analysis of public real estate markets. The Journal of Real Estate Finance and Economics, 51(2), pp.125-159. Gorton, G.B., 2008. The panic of 2007 (No. w14358). National Bureau of Economic Research. Herring, R.J. and Wachter, S.M., 1999. Real estate booms and banking busts: an international perspective. Hofmann, B., 2003. Bank lending and property prices: Some international evidence. Hong, H. and Stein, J.C., 2003. Differences of opinion, short-sales constraints, and market crashes. Review of financial studies, 16(2), pp.487-525. Koo, R.C., 2011. The Holy Grail of Macroeconomics: Lessons from Japan? Great Recession. John Wiley Sons. Lamont, O. and Stein, J.C., 1997. Leverage and house-price dynamics in US cities (No. w5961). National bureau of economic research. Lang, L., Ofek, E. and Stulz, R., 1996. Leverage, investment, and firm growth. Journal of financial Economics, 40(1), pp.3-29. Larsson, R., Lyhagen, J. and Là ¶thgren, M., 2001. Likelihoodà ¢Ã¢â€š ¬Ã‚ based cointegration tests in heterogeneous panels. The Econometrics Journal, 4(1), pp.109-142. Im, K.S., Pesaran, M.H. and Shin, Y., 2003. Testing for unit roots in heterogeneous panels. Journal of econometrics, 115(1), pp.53-74.<