Relation between Economics and Law

Relation between Economics and Law The study of Law without the knowledge of other related social sciences i.e., Political theory, Sociology and Economics, etc, is incomplete. In any law curriculum the study of Economics and Law and their interaction is increasingly found necessary.As Law influence Economics, Economics also influence Law. As a matter of fact Economics forms the basis of the study of Law. Economics reflects the socio-economic ethos of the country in particular and world in general. It becomes out of date and misleading if the Economic ethos change. But it was proved to be wrong by Dalton. The organisation, industrial structure and performance have changed in the thirty years. E.g.: policy goals, policy instrument, Economic institutions.Economics derives its aims and objectives from the study of man and must derive at least a large part of its methodology from a study of Nature. Legal Economics is a vital part in understanding the interactional dimension of Law and Economics, i.e.,Economics Q & A, IVhow modern Economics can be used to illuminate a number of legal problems. It is not sufficiently realised that the economic analysis can aid our understanding of the Law and how economic factors limit and shape the operation of crime control and legal systems. Economic considerations have varied and widespread effects on the costs and benefits that prospective offenders may expect from crime, on decisions to litigate or to settle out to court, on the significance of legal costs the practical problems of legal administration and the provision of legal services. Law and legal policy help to determine the behaviour of the economy. There are extensive legal constraints on the allocation and the distribution of resources and on labour and housing markets.The social functions of Law are broadly classified into three:(1) Encouraging good behaviour and discouraging bad behaviour.(2) Facilitating the...

N.B. Meaning

N.B. Meaning Now, pay attention! Thats the basic meaning of N.B.  -   the abbreviated form of the Latin phrase nota bene (literally, note well). N.B. still appears in some forms of academic writing as a way of steering readers attention toward something particularly important. Two or three centuries ago, when classical Latin was widely taught in British and American schools, it wasnt unusual for Latin expressions to appear in English prose. For proof, pick up an American dollar bill and look at the Great Seal of the United States on the reverse (or greenback) side. There on the left, just above the floating eye and the unfinished pyramid, is the Latin phrase Annuit Coeptis, loosely translated as Providence has approved our undertaking. At the base of the pyramid is MDCCLXXVI (1776 in Roman numerals) and below that the motto Novus Ordo Seclorum (a new order of the ages). To the right, on the ribbon in the eagles beak, is the countrys first motto, E Pluribus Unum, or one out of many. Now thats a lot of Latin for a buck! But keep in mind that the Great Seal was approved by Congress way back in 1782. Since 1956 the official motto of the U.S. has been In God We Trust -   in English. As the Romans used to say, Tempora mutantur, nos et mutamur in illis (Times change, and we change with them). Nowadays, with a few exceptions (such as A.D., a.m., and p.m.), abbreviations for Latin words and phrases have become rare in ordinary writing. And so our advice regarding most Latin abbreviations (including e.g., etc., et al., and i.e.) is generally to avoid using them when an English word or phrase would do just as well. If you must use them (say in footnotes, bibliographies, and technical lists), consider these guidelines on how to tell them apart and use them correctly.

Culture shock Essay Example | Topics and Well Written Essays - 750 words

Culture shock - Essay Example Three types of cultural adjustments are noted in the world. First, there is the culture surprise. This is experienced by individuals who note the superficial differences between the two cultures. For example, it is easy to notice the dressing style and attires of the two cultures. Similarly, an individual will note the language signs and nonverbal communication. Apparently, an individual moving from Saudi Arabia to America will note such differences. For example, the dressing in Saudi Arabia is different from the dressing in America. Secondly, there is the culture stress. This is where an individual has to adapt to the new culture. This could be a daunting task especially when an individual is immensely connected to their culture. In many cases, a person will learn these activities for acceptable living (McInnes 14). For example, a person will learn to drive a car while using the stated regulations. A perfect example is that, most of the American vehicles are left-hand-drive. This co uld be a daunting task to people who are used to driving Right-hand-drive vehicles. Thirdly, there is the ultimate culture shock. This is a psychological reaction, which is normal. These are the reactions to the stress experienced by a person emanating from the change in values. For example, when in America, shaking hands is a normal occurrence. As such, people will often shake hands as a way of greeting. In addition to this, hugging a person shows affection and connection. Saudi Arabia is a country dominated by the Islamic religion. As a fact, a better percentage of the country’s population practices Islam. Therefore, most of the values and beliefs are inclined to Islam. Secondly, Saudi Arabia is dominated by a single ethnic group, which takes close to 90%, as most of the people communicate through the Arabic dialect. As a fact, there is an immense difference between the mode of communication in the urban places and rural areas. Thirdly, people in Saudi Arabia have a liking for large and extended families. This enhances continuity of the family. Consequentially, the extended and large families have an advantage. For example, when they are involved in family business, most of the family members will be employed. It is noted that people in Saudi Arabia have a soft spot for nepotism (McInnes 34). This implies that it is safe to employ people who are trusted and known rather than employing people from other ethnic and family backgrounds. Fourthly, during entertainment, it is noted that only people of the same sex are allowed in a single room. Similarly, the attendance should dress conservatively and remove their shoes before gaining access to the house. Fifthly, people always eat with their right hand. This is after declaration that the left hand is unclean. Lastly, Arabians are generous when it comes to food. Therefore, people will be served in abundance. Apparently, the guest should try to taste all the servings. On the other hand, the United States has diverse religions. Some of the religious affiliations include Christians. This has influenced the diversity of the cultural values and beliefs in the United States (McInnes 17). Therefore, migrating from Saudi Arabia to United States will be a culture shock to an individual. For example, the Muslims have a preferred mode of dressing for both females and males. However, in the United States, each individual has a discrepancy to the choice of dressing code. This could adversely affect a

Critical Self-Analysis Paper Essay Example | Topics and Well Written Essays - 500 words

Critical Self-Analysis Paper - Essay Example I have been able to be more careful about the equation between the amount of calories I consume and the amount I spend (Hoeger and Hoeger 2012). I began this workout program in the recent past but I intend to continue to be a part of it in the future. I have already increased the number of times I visit the fitness center from three to five. Given the health record of my family, I believe that it is necessary for me to be a part of a strict regimen for fitness. My father does not smoke and his consumption of alcohol is limited; yet he suffers from high levels of blood sugar and cholesterol. My mother too suffers from high blood pressure. My workouts, as I mentioned, left me tired for a short duration, thereafter raising my energy levels. I found that this left my body in the perfect state for sleep as well. While my sleep used to be fitful earlier, I now have a good night’s sleep every day. The program has also streamlined my physical activity in such a way that I do not work out anytime near my sleep schedule. Maintaining the schedule of my natural body clock is something that this program has enabled me to do. It has at the same time, percolated down to my awareness of the necessity of sleep, something that work and stress often obfuscate (Hoeger and Hoeger 2012). My earlier lifestyle was more stress-filled leading to my inability to provide my body and mind with enough rest. This workout program has been very helpful in this regard. My diet before joining the workout program was not an unhealthy program. My family eats a diet comprising vegetables and adequate protein. Joining the program has thus, enabled the addition of exercise to a good balanced diet, thereby completing the two most important requisites of a healthy lifestyle. I have, however, reduced the intake of fats in my diet, restricting it to the consumption of healthy fats. The workout keeps me thirsty, enabling the consistent hydration of my body. As a result of all these changes, my

College Life Essay Example for Free

College Life Essay College is much different from my high school in so many ways. In my high school we was always on the same routine. We had four periods a day and first period started at 7:45 and we was on a block schedule meaning our classes was an hour and thirty minutes long. We had the same classes everyday so more learning during the day and less homework. Immediately after school we had football practice four days a week and played on Fridays. High school Is a good preparation for college, even though while in high school you will never expect what happens in college. In high school your parents were more involved in what go on in your daily life, whether you get in trouble in class or you get sick at lunch. College is an great experience I think everyone should have. In college you will learn responsibilities and how to take care of yourself. My life have change dramatically, went from seeing my family everyday to seeing them every three weeks maybe. The classes in college is much different than high school , there is no set schedule to do your homework or to study. This is where the responsible part come in, you are responsible whether you eat , sleep, study, have fun and even exercise. I didn’t mention being a student-athlete was hard as well, even though if I wasn’t an athlete I wouldn’t be a student. College not for everyone but if you have the opportunity at your grasp take advantage and make your family proud. Student-athletes have to set times like everyone else in college to complete there work and go to class but also they have to maintain there practice schedule daily. Being an athlete at Albany State is wonderful the fan base is so incredible and the odds are stack against us of making it pro. That’s why we are worked so hard and put to the test on the field and in the class room. Being a football player, practice start at 2:45 and end at 5:00 or so and some players have class after practice which is difficult to make some days but class is MANADTORY at Albany state. The coaches here are great and most of the coaches are alumni of this great school so they care about the organization deeply. Albany State Golden Rams is a Division ll power house which most teams underestimate and we show it to them on Saturdays. Here at Albany State Football players are respected not for what we do on the field but also of what we accomplish in the classrooms. I am very glad that I am able to attend Albany State University. Everything here is so overwhelming starting with The New Student Union Building . The food is amazing and the staff is amazing and caring. The games and the televisions are so entertaining and sitting in there is so relaxing and is a great study area. Campus life is the best of college experience meeting new people and socializing in the dorms. Here at Albany state are people that your going to be life long friends with. This campus is so secure thanks to the campus police. They are very concerned about the residents and love to protect and serve. If I had the choice to go to another institution I would not go Albany state is the life to live and the best college experience in the world. I appreciate what the staff, professors, coaches, police, RA’s , hall managers, and the Preside.

Genetic Engineering :: Genetic Engineering Essays

At the Roslin Institute in Edinburgh, Scotland, Dr. Keith Campbell, director of embryology at PPL therapeutics in Roslin, and his colleague Dr. Ian Wilmut worked together on a project to clone a sheep, Dolly, from adult cells. On February 22, 1997, they finally succeeded. Dolly was the only lamb born from 277 fusions of oocytes with udder cells. Wilmut says there were so many failures because it is difficult to ensure that the empty oocytes and the donor cell are at the same stage of the cell division cycle.To clone Dolly, basically scientists took an unfertilized egg cell, removed the nucleus, replaced it with cells taken from the organism to be cloned, put it into an empty egg cell which begins to develop as an embryo, and implanted this embryo into a mother, from which the clone was born.The fact that only 1 out of 277 attempts succeeded is a little scary when applied to human beings. If an attempt to clone a human led to that high of a death toll, then there would not be many supporters. According to Rifkin, in an extensive survey of all 106 clinical trials of experimental gene therapies conducted over the past five years involving more than 597 patients, a panel of experts convened by the NIG reported that "Clinical efficacy has not been definitively demonstrated at this time in any gene therapy protocol, despite anecdotal claims of successful therapy." (545). These results are also happening with people who are trying to get gene therapy. With these facts on the table, it would not be ideal to try to clone humans if cloning an animal took several hundred attempts and human gene therapy has had hundreds of failures as well.Humans are going way beyond their limits in the field of biotechnology in the world today. Until recently, these ideas were unheard of. Now with new technology, scientists are capable of changing an organism's genetic make-up. We are very eager to learn new things, however, this eagerness gets in the way of common sense all too often. As stated in Starr and Taggart's article, "we do not have the wisdom to bring about beneficial changes without causing great harm to ourselves or to the environment." (514). However, the naà ¯ve public may want to jump right into things, and scientists will not disagree.Scientists are messing with things that they should not be messing with.

Analysis of Motives and Prospects within the OLI Framework: A Case Study of German FDI in China

Abstract This study deals with an analysis of German FDI in China using the OLI framework, an eclectic framework for analysing FDI. Other theories that aid in explaining German FDI’s motives and prospects in China are the internalisation theory and the product cycle theory. This study is mainly qualitative, using secondary data from existing literature. It suggests that German FDI is guided by internalisation advantages, location-specific advantages, and ownership advantages in its motives and prospects in the Chinese market. The internalisation advantages for German FDI in China include incentives derived from conducting such FDI in the country over other locations or through exporting. Location-specific advantages are identified as cheap, trained labour, export-oriented nature of existing FDI, quality of local infrastructure, access to natural resources, and cooperation agreements with local suppliers and the Chinese government. Ownership advantages, on the other hand, are identified as technology-based infrastructure and management know-how. Introduction This report deals with the analysis of motives and prospects within the OLI framework, focusing on a case study of German foreign direct investment (FDI) in China. To begin with, it is important to define and describe what the OLI Framework is. The OLI framework was developed by Dunning (2010) and is considered an eclectic approach to the study of FDI. It has been a guaranteed viable means to think about MNEs, which likewise paved the way for a range of applied works in economics and international business. Albeit it does not constitute a formal theory in itself, the OLI framework is nevertheless helpful in classifying many recent empirical and analytical studies concerning FDI (Reinert et al., 2009). Foreign direct investment (FDI) has been an important characteristic of globalisation. It is different from portfolio investment since it involves a package of assets and intermediate products and is generally carried out by MNEs (Blanco and Razzaque, 2011). Germany is China’s mo st important trade partner from Europe. In 2003, German companies were placed as the top European investors in China and were ranked as the seventh largest investors in the country. Albeit the ˆ7.9 billion investment of German companies in China comprised a tenfold increase from 1995, this only constituted 1.2 per cent of total German FDI. Most of these investors were manufacturing companies (around 2/3 of all German investors). Some of the pioneer German companies in China are Bayer, Siemens, and Volkswagen, which have been doing business with China for more than a hundred years (Reinert et al., 2009). China has large market potential as proved by about 76 million abundant consumers in the country, which is even larger than Germany’s total population. China is also characterised by low-cost assembly line, which serves as a major driver for investing in the country. Apart from it, its WTO membership has been an important driving factor behind German FDI, as WTO enabled ea sier access to China’s market (Bao, Lin, and Zhao, 2012; Reinert et al., 2009). The issues besetting German FDI in China are the unrelenting legal uncertainties in the country, as shown by the lack of intellectual property rights protection; limited market transparency; the rapidly changing regulatory framework conditions and obstacles; inadequate potential supplier networks; and difficulty in searching for relevant market information due to the problem involving the identification of individual market segments (Reinert et al., 2009). Potential German investments also face high input prices in China, such as high prices for raw materials and electricity, thereby making it all the more difficult to attain profit margins. There is also a rising competition in China in the midst of the growing attractiveness of its market. Given this context, this research intends to look into the intentions and outlook of German FDI in China, using the OLI framework to evaluate them.1.1 Objecti ves of the ResearchThe objectives of the research are described as follows: To analyse the German FDI in China in terms of its motives and prospects within the OLI framework; To describe the theoretical underpinnings surrounding German FDI activities in China; and To analyse how the OLI framework functions as a relevant model for the dynamic development of MNEs and German FDI within the increasingly growing Chinese market. Literature Review This part of the research report presents an array of published works relating to the topic of investigation to give light to the important concepts and to serve as evidence to the claim that may be posited. It also involves a description of methodology and data used.2.1 Methodology and Data UsedThis research is characteristically qualitative, which means that it is value-bound and relies on interpretations. It is predominantly inductive and is carried out in natural settings, discounting the use of quantities and measurements, which are confined within the domain of quantitative research (Klenke, 2008). This research also uses a case study method, which is described as â€Å"the study of the particularity and complexity of a single case† (Simons, 2009: 19), which in this report is the German FDI in China. Case study as this report’s research approach acknowledges the tradition in which it is drawn upon, specifically qualitative research (Simons, 2009). Secondary data a re solely used for this report. These are data that have been collected by a person (e.g. an author) and are being used by another (e.g. a researcher) for his/her own purpose (Oleckno, 2008). These data are therefore non-original. In this research report, they are mainly taken from books, academic journals, and relevant online resources relative to the topic being investigated. The search engines used to locate the needed materials are Google, Scholar Google, and Books Google, from which a number of sources have been uncovered. The journal articles utilised from these search engines are published by Wiley and Elsevier.2.2 Literature Review on the Motives and Prospects of German FDI in ChinaAccording to Zhang (2005), China’s location characteristics would help to understand and appreciate massive FDI in the country. The four determinants of China’s location-specific factors for the influx of FDI are its export-promotion strategy for FDI, its dominant availability of che ap labour, and export-orientation of FDI injected by the countries entering China. In the case of Hong Kong and Taiwan, unique links with China (the Chinese connections) are important determinants. The study uses a qualitative method and a case study design in dealing with the subject matter. Its applicability to the topic under investigation is seen in its direct focus on FDI in China and how China has flourished as a location for countries to engage in FDI. The limitation posed by the study is its emphasis in Hong Kong and Taiwan and does not include German FDI, which does not however mean that the study is already totally irrelevant. In the work of Chen and Reger (2006), German FDI in China has been described as one that has grown larger in size and of higher quality (alongside related technological activities), with long-term motives and broad market orientation. German FDI also seeks new markets and expands market shares within China. The authors second Zhang’s (2005) ea rlier claim for FDI determinants in China, such as cheap, abundant labour, and export orientation; and added some more, including China’s huge domestic market, access to natural resources, and enforced tax incentives. The research approaches used by the authors include a mail survey and a database analysis. The work is applicable to the present study because of its emphasis on the nature of German FDI in China. In a separate study by Pikos (2013), the author presents an investigation of the consequences of FDI for German companies in China. The author highlights the differences amongst the following: FDI in China, FDI elsewhere, and exporting. When size and sector activity are controlled, attributes to FDI in China include turnover, employment, net income, profit margins, and total assets, to name some. Albeit performance is boosted through FDI elsewhere, this is however on smaller scale. It is noted that investing in China results in better outcomes than doing FDI in another country, and this is due to China’s large and rapidly growing market. The methods used by Pikos (2013) are descriptive and econometric analysis in order to address the research topic. The applicability of the work to this research is its description of German FDI in China, thereby aiding the research to give light to the topic. A limitation of the study is its focus on location-specific factors for FDI. On the other hand, Zhang and van den Bulcke (1999) state that the expansion of FDI and its embodied technology are two of the key forces that molded the development of the Chinese automotive industry. Germany is an important source of inward FDI in China’s automotive industry, third to Hong Kong and the United States respectively. FDI in the automotive industry during the 80s was highly focused on the assembly of whole vehicles. In the 1990s, FDI became highly concentrated on the manufacturing of parts and components. Since the Chinese government in the 1990s had stric t control of the Greenfield investment projects for whole vehicle manufacturing, the latecomers encountered quite high entry barriers since dominant positions were already occupied by early movers. European automotive multinationals strongly influenced the restructuring of China’s automotive industry since the 80s. Moreover, China’s European car manufacturers have engaged in cooperation agreements with the Chinese government and local suppliers and often extend technical and financial assistance to local suppliers. An example of this is a 5-billion Chinese Yuan contribution of Shanghai Volkswagen for localisation funds (Zhang and van den Bulcke, 1999). The approach of Zhang and van den Bulcke’s (1999) study is chronological, mainly basing from existing secondary literature. The study is relevant and applicable to the topic under investigation as it provides useful and sufficient insights on the nature of the Chinese automotive industry and the chronological deve lopment of European FDI in the country, which can aid in analysing the current motives and outlook of German FDI in China. The research limitation is bounded within the study’s concentration on the Chinese automotive manufacturing industry. Analysis and Discussion The analysis and discussion provided for this research report is anchored on the literature review being carried out for German FDI in China.3.1 Analysis of German FDI in China Using the OLI FrameworkThe OLI Framework pertains to the three potential sources of advantage; namely Ownership, Location, and Internalisation, that lie beneath an organisation’s decision to enter into a multinational level of operation. Ownership advantages explain the reason/s why firms operate abroad whilst others do not, and indicate that successful multinational enterprises (MNEs) possess firm-specific benefits that enable them to overcome the costs entailed in operating in a foreign country. Location advantages, on the other hand, concentrate on the location aimed by an MNE (Reinert et al., 2009). Access to natural resources serves as a location advantage for choosing China for which to invest, as in the case of German FDI. Additional determinants of location selection for FDI are availability of cheap trained labour (e.g. Chen and Reger, 2006; Pikos, 2013; Zhang, 2005) and quality of local infrastructure (Tang, et al., 2012). Other critical factors are a smooth relationship with Chinese authorities, both central and local; and experience to cope with Chinese bureaucracy (Tang, et al., 2012). Such relationship is the bottom line for German FDI to engage in cooperation agreements with the Chinese government and local suppliers, as earlier highlighted by Zhang and van den Bulcke (1999). Zhang (2005) also highlighted in his work that China’s location characteristics would help to understand and appreciate massive FDI in the country. Internalisation advantages – another embodiment of the OLI framework – provide the influence on how a firm decides to operate abroad, making a trade-off between transaction savings and monitoring costs of a completely-owned subsidiary, on one hand; and the advantages of other forms of entry, such as joint venture and exports, on the other. A main characteristic of this approach is that it provides emphasis on the incentives for the individual firm. Mainstream international trade theory has considered this a current standard, which was not the case in the 1970s when FDI was classically regarded as an international movement of physical capital in pursuit of higher returns (Reinert et al., 2009; Taliman, 2007). The internalisation advantages embodied in the OLI framework are also found in the study of Pikos (2013) in the literature review, which magnifies the differences amongst conducting FDI in China, elsewhere, or through exporting, apparently aiming to ascertain the incentives that can be gained from choosing the most suitable out of the three options. The OLI framework is in fact an eclectic paradigm that provides a general theoretical framework for ascertaining firms’ FDI activities beyond their national borders. The eclectic paradigm is an analytical theory that accommodates other FDI theories a nd views most of the theories as having complementariness with each other (rather than having substitutability) of which their application can be fully enhanced (Tang et al., 2012). Internationalisation theory is one of the general theories of FDI, which views a MNE as an organisation that engages in utilising its internal market to produce products and distribute them efficiently in situations where a regular market encounters failure of operation. In effect, the internationalisation theory regards MNES taking on FDI activities abroad as a way to respond to goods and factor market imperfections, which have in fact prevented international trade and investment to operate efficiently (Tang et al., 2012). Through FDI, MNEs are able to produce and distribute their products via internal markets, thereby enabling them to optimise efficient production and improve the total profits. This notion must also constitute the motives and prospects for German FDI to conduct business in China. It mu st be noted that a MNE only employs FDI if the cost is outweighed by the benefits (Suneja, 2006; Tang et al., 2012). Worthy of note is the idea that in the lens of the internationalisation theory, knowledge, information, and research are intermediate products to be readily and directly traded to other countries due to the risk of loss of knowledge advantage (Rugman, 2002). However, MNEs possess vertical and horizontal integration, enabling the creation of their own internal markets, whereby intermediate products such as technology know-how are converted as a firm’s valuable property. This reflects the ownership advantage embodied in the OLI framework, as discussed by Reinert et al. (2009) and Taliman (2007). Hence, as the MNE sustains its competitive advantage, its ownership such as management know-how can be utilised and bolstered (Tang et al., 2012). The Uppsala Model looks at the internationalisation process as cyclic, experiential, and resource-based learning-by-doing, wh ich seems to foresee later research flows regarding dynamic capabilities and temporary competitive advantages with the internalisation framework (Sanchez and Heene, 2010). Based on the analysis, the internationalisation theory cannot in fact be seen as a separate body of thought from the OLI framework because it has a similar trail with such framework in relation to understanding the motives of a MNE (e.g. German firm) and its outlook to engage its FDI in a country like China. Meanwhile, the product cycle theory describes the so-called ‘wild geese flying’ patterns of foreign trade to explain the different economic development phases of countries. This theory cites three phases of industrial development with which each country attempts to elevate itself o the top phase of industrialisation. The theory says that the mature phase takes place once industrialisation development has been extensively laid down over the entire region or country with robust dynamic growth (Tang et al., 2012). It is interesting to consider that the OLI framework may be fastened over the product cycle theory in analysing German FDI in China, and that the relevance of the framework cannot be set aside when the chronological developments involved in the industrialisation process are taken into account. The applicability of the twin analysis of OLI framework and the product cycle theory is seen in Zhang and van den Bulcke’s (1999) study, which uses chronological discussions to describe the growth of European FDI in China, and cites the ownership-specific, location-specific, and internalisation-specific factors of European firms (e.g. German firms) to invest in the Chinese automotive sector.4. ConclusionThis research report deals with analysing the motives and prospects of German FDI in China within the OLI framework. The OLI framework is an eclectic framework that accommodates other theories of FDI and explains the intentions and outlook of MNEs to engage in FDI in China . The motives and prospects of German FDI to continuously seek to invest in Chinese market is propelled by internalisation advantages (e.g. incentives through conducting FDI in China rather than elsewhere or through exporting); location-specific advantages (e.g. cheap trained labour, export-orientation of FDI; access to natural resources; quality of local infrastructure; cooperation agreements with the central and local governments and local suppliers); and ownership-specific advantages (e.g. management know-how; technology-based infrastructure). The rapidly growing globalised market ushers the German FDI to continuously seek newer FDI prospects within China, beset by the growing competition and search for competitive advantages. References Bao, S., Lin, S., and Zhao, C. (2012) The Chinese Economy After WTO Accession. England, Ashgate Publishing Limited. Blanco, E. and Razzaque, J. (2011) Globalisation and Natural Resources Law: Challenges, Key Issues and Perspectives. Glos: Edward Elgar Publishing Limited. Chen, X. and Reger, G. (2006) The Role of technology in the Investment of German Firms in China. Technovation, 26 (3), 407-415. Dunning, J. H. (2010) New Challenges for International Business Research: Back to the Future. Glos: Edward Elgar Publishing Limited. Klenke, K. (2008) Qualitative Research in the Study of Leadership. Bingley, IWA: Emerald Group Publishing Limited. Oleckno, W. A. (2008) Epidemiology: Concepts and Methods. IL: Waveland Press, Inc. Pikos, A. K. (2013) German FDI in China: Consequences for Firms’ Performance (Published Thesis]. Denmark: Aarhus School of Business, Aarhus University. Reinert, K. A. and Rajan, R., Glass, A. J., and Davis, L. S. (2009) The Princeton Encyclopedia of the World Economy. Oxfordshire: Princeton University Press. Rugman, A. M. (2002) International Business: Theory of the Multinational Enterprise. New York: Routledge. Sanchez, R. and Heene, A. (2010) Enhancing Competences for Competitive Advantage. First Edition. Bingley, IWA: Emerald Group Publishing Limited. Simons, H. (2009) Case Study Research in Practice. First Edition. London: SAGE Publications Ltd. Suneja, V. (2006) Understanding Business: A Multidimensional Approach to the Market Economy. New York: Routledge. Taliman, S. B. (2007) A New generation in International Strategic Management. Glos: Edward Elgar Publishing Limited. Tang, S., Selvanathan, E. A., and Selvanathan, S. (2012) China’s Economic Miracle: Does FDI MatterGlos: Edward Elgar Publishing Limited. Zhang, K. H. (2005) Why Does So Much FDI From Hong Kong and Taiwan Go to Mainland ChinaChina Economic Review, 16 (3), 293-307. Zhang, H. and van den Bulcke, D. (1999) The restructuring of the Chinese Automotive Industry: The Role of Foreign Direct Investment and Impact of European Multinational Enterprises. Belgium: University of Antwerp. Analysis Of Motives And Prospects Within The Oli Framework: A Case Study Of German Fdi In China Introduction There are a number of theories that explain motives and prospects of FDI. OLI framework is the one that is most widely used by economists. According to OLI, there have to be advantages that can offset costs of making direct investment abroad. In this paper we apply the OLI framework to understand the motives behind German FDI in China. A case study of Volkswagen China is conducted to show the application of OLI in practice, and to demonstrate why FDI abroad can be a success story despite all the difficulties a company faces in a foreign environment. Literature Review One of the earliest theories explained FDI in terms of market imperfections. Kindleberger (1969) argued that for companies to gain advantage by investing abroad market has to be imperfect . If we assume that markets are perfect there is nothing foreign companies can exploit to make enough profits that will offset costs and risks associated with investing abroad (Kindleberger 1969).. The concept of firm-specific advantages was introduced to explain how market imperfections lead to foreign investment. Among these advantages are superior technology and marketing (Caves 1971), cheap labour (Grubel 1968), management skills (Wolf 1977), and exclusive access to natural resources (Lall and Streeten 1977). . Only when a foreign company possesses these firm-specific advantages can it successfully invest and become a major player in a foreign market and compensate for the disadvantages of being foreign in the country of its operation (Hymer 1976). Vernon’s product life cycle is another major FDI theory that tries to explain motives and the rationale behind FDI. Vernon (1966) dissected product life cycle into three distinct phases – innovation, maturity and standardisation Established companies in developed economies invest in new projects to design innovative products that will sell in future and guarantee a new profit channel for them. When a new product is designed, it is sold in the domestic market. Consumers gradually get used to it and demand new products. This leaves the company with two not mutually exclusive choices – get back to the innovation phase and design something new, or go abroad and produce the same products there. Going abroad is sometimes a better choice because foreign producers (such as China) start to imitate the existing product and become so good at it that the differences with the original become marginal (Vernon 1966). A later theory developed by Dunning (1977) has become widely used in attempts to understand the motives behind FDI. The theory became known as OLI: Ownership, Location and Internalisation. All three elements should be present in order for FDI to occur. This theory will be explained in greater detail in a separate chapter of this paper. Theoretical FrameworkDefinition of FDIAccording to the Organisation for Economic Co-operation and Development (OECD) (2008) 4th Edition of Benchmark Definition of FDI, FDI is â€Å"a category of cross-border investment made by a resident entity in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor† . Companies carry out FDI because they want to have direct control over their enterprise. This is what makes FDI different from portfolio investments which usually result in an ownership of less than 10 per cent of a foreign company’s capital. Hence the investor does not have real control over the foreign company (OECD 2008). Mergers and Acquisitions (M&A) and Greenfield investments are the two different types of FDI. The choice between them has different implications for the parties concerned. M&A happen when an existing company is bought out by a foreign firm. In contrast Greenfield investments are investments into new assets. For developing economies, including China, M&A are more common, for developed economies like Germany Greenfield investments are a popular choice (Shatz and Venables 2000). FDI are divided into horizontal and vertical; only in a few cases do the two occur simultaneously. Horizontal FDI occurs when a company invests in a firm built to serve the foreign market (Shatz and Venables 2000). . This foreign firm then performs the same activities as the host firm does in its own domestic market. With vertical FDI, the production cycle is fragmented so that each phase can be completed in a country where it can be done cheapest of all (Shatz and Venables 2000). OLI Framework The OLI framework is a theory that explains motives and the rationale behind multinational corporations’ (MNCs) decision to choose FDI instead of licensing use of their name or product to foreign producers or sellers (Lynn 2008). . FDI is a foreign investment so, for it to occur, the investing firm has to acquire assets in a foreign country. FDI is called direct investment because it results in a direct and real control over the acquired capital. MNC acquires a right to produce what it wants in a foreign country and decide where it wants to sell the product. As explained above, the whole product (horizontal FDI), or parts of it (vertical FDI), can be produced in a foreign country based on the considerations of cost-effectiveness (Shatz and Venables 2000).. FDI occurs because there are advantages to it. The first one is ownership advantage which stands for â€Å"O† in the OLI abbreviation. There has to be some advantage to owning the foreign asset. These can be lower costs, greater reputation, or swifter transition to a foreign market. Take for example Apple. The company has a reputation for high quality products so by owning a production facility in a foreign developing country it can still make profits that will offset costs of FDI (Lynn 2000). . Ownership advantage alone is not enough for FDI to occur. Here is when the â€Å"L† comes into play. â€Å"L† denotes the location advantage. A less costly labour force, access to the natural resources needed in manufacturing and a better geographic position (which leads to more efficient logistics), are some of the location advantages that can make companies seriously consider investing abroad (Lynn 2000). . Again this is not enough for FDI because everything described above can be achieved by brand licensing or through establishing joint ventures. FDI needs a third element – internalization, or control, advantage. This is the â€Å"I† in OLI. When it is believed that MNC can lose market share in case another company gets access to the same asset, FDI becomes the only choice available (Lynn 2000). . It is known that at some stage, foreign producers start copying products produced in the developed world and when they do it they are able to offer cheaper prices thus outperforming foreign producers in sales. To prevent this scenario many companies prefer to go with FDI and gain exclusive control over their assets. Methods and Data In this research, we conduct a critical review of the main theories of FDI, paying special attention to the OLI framework. While we acknowledge the importance of OLI in understanding international business and FDI in particular, we provide a short overview of criticisms of the paradigm so that readers have an understanding of the potential limitations of this research. A case study of German car manufacturer Volkswagen is used as a method of understanding FDI under the OLI framework as applied to the German investor interest in China and the two country’s bilateral economic relations. Additionally, we use statistical information to put some numbers into perspective and cite a research by Deutsche Bank which includes some forecasts as to the future of German FDI in China. Volkswagen (VW) Case Study Volkswagen was founded in 1937 (Datamonitor 2011). The name of the brand translates as â€Å"the car of the people† (Datamonitor 2011).. Volkswagen is represented in China through two ventures – with Shanghai Automotive International Company founded in 1985 and with First Automotive Works started in 1990 in Changchun (VW Annual Report 2010). VW has always regarded China as an important market. Today, there are 9 production facilities in China and 2 more are planned. VW’s target is to sell 3 million cars per year. Through 2015 VW is set to invest a total of 10.6 million euro to expand its production in China. VW is actively involved in producing electric vehicles in China. Both E-Golf and E-Lavida were presented in China and the first electric test was made here in 2011. VW is also set to produce a new brand specifically for the Chinese fast-paced economy (VW Annual Report 2010). Volkswagen Analysis Based on the OLI ParadigmOwnership advantageVW is one of the world’s most successful car manufacturing companies and, as such, it has a lot of advantages. VW is known in Europe for its technological advances and efficient production system. VW brand is strong all over the world. Many consumers associate vehicle design innovation, cost-effectiveness, and high safety standards with VW and consider it as their first choice when making decisions on buying a vehicle (VW official website 2011). Not surprisingly, VW had a competitive advantage over all Chinese manufacturers at the time of the entry into the market (VW official website 2011). In fact, VW is still superior to any of the Chinese car producers. VW exploited its technological dominance and increased its brand recognition. Chinese consumers were happy with the product offered and enjoyed VW’s presence in their country. Currently, VW strives to adjust its technology to meet changing customer need s and develop sustainable models for future (Yu 2010). .Location advantageVW’s joint venture in Shanghai was the most successful car enterprise in China at the time it was established in 1985 and it retains the top position today (Li 2000). . Locating in China, and Shanghai in particular, was the best possible decision for VW in terms of location because the region is rapidly developing and the people’s life standards are improving. Shanghai is the most densely populated and prosperous city in China and it has close ties with the central part of the country (Li 2000). Products from Shanghai are considered to have high quality across China and do not face any obstacles due to local protectionism. It should be also noted that at the time VW entered China it received many incentives and support from the government. The government still stimulates the automobile industry to increase domestic sales and contributes to the development of the sector. Thanks to these location a dvantages, VW China became a success and continues to be a source of decent income for the parent company (Li 2000)..Internalization advantageVW had the first mover’s advantage which helped it to become a major player in the new market. The company managed to take control over the major share of the Chinese market and realise all its ownership advantages. This first mover advantage till today helps VW to be very competitive with regards to Japanese and American rivals. To retain its market share, VW continues to innovate according to the changing tastes of the Chinese consumers and requirements to reduce the strain on the environment resulting from manufacturing and exploitation of automotive vehicles (VW official website 2011).Future of German Interest in ChinaChina has attracted German interest more than any other emerging country since 1997 (Deutsche Bank Research 2004). German companies explain their excessive interest in China by citing the country’s huge market p otential. In 2001 there were about 76 million prosperous consumers in China – a population that is worth FDI in any country despite possible barriers and foreign culture-related challenges (Deutsche Bank Research 2004). This number of prosperous consumers in China is greater than the total population of Germany and it is set to increase tenfold by 2015. The second most important argument for German FDI in China is the â€Å"extended low-cost assembly line† (Deutsche Bank Research 2004). Cost has always been one of the most important considerations in business decision-making.. Heated global competition for competitive advantage and market shares across virtually all industries means that companies need to find cheaper options for manufacture. China is often the best solution because of the low-cost labour force it offers. Not surprisingly, Germany, alongside other strong economic powerhouses, chooses China as a low-cost manufacturing site and actively invests there (D eutsche Bank Research 2004). Another reason for German FDI is the growing economy of China and its potential to become a dominant power. Germany has to defend its interest in a country which is set to become a global leader with an over 1 billion of potential buyers of products and services. Of course, China is a completely whole new world for German businesses that has to be explored until there is sufficient understanding required for making informed decisions. Usually, most foreign companies entering China lack information vital for their success and have to be quick to adapt or risk becoming a failure. China cannot be considered â€Å"one country – one market†. It is bigger than both Eastern and Western Europe put together (Deutsche Bank Research 2004) and it is naive to think that one product design or pricing strategy will work across the whole country (Deutsche Bank Research 2004). Hence a lot of prior planning is required (Deutsche Bank Research 2004). Among other obstacles that can potentially deter German interest in China are high input prices. There are a lot of protectionism locally, and also many logistic and bureaucratic inefficiencies that are not easy or cheap to overcome. Moreover, the global prices for raw materials and energy resources a re growing which adds to the cost of production even in China (Deutsche Bank Research, 2004). The final commonly-cited obstacle to German interest in China is the heated competition amongst different foreign companies coming from such developed nations as USA, Canada, and Australia. Everyone knows about advantages of investing in China and hence there is a lot of competition for assets and control over the market.Criticism of OLI frameworkThe OLI framework offers a very useful insight into the motives and the rationale behind FDI. The paradigm has evolved over the time to adapt to changes in the way international business is conducted (Narula 2010). Critics of the theory argue that because of expansion of OLI’s application to all MNE-related phenomena, it now risksbecoming tautologous (Narula, R. 2010). Narula proposes a return to the classic OLI framework and using alternative theories to understand the more complex new developments rather than internalising everything so th at it fits OLI. Narula acknowledges the importance of OLI in early research on the international business and FDI, but argues that it is not suited for explaining everything that happens in business (Eden 2003). In fact, it is becoming cumbersome to apply OLI to understanding international business, as the latter has became complex (Eden 2003).There is a need for new frameworks. OLI can still be a valuable tool in understanding some aspects of international business and FDI, but should lose its dominance in the academic community (Narula, R. 2010). Conclusion German interest has been present in China for almost half a century. Because Chinese market is huge and has a big growth potential, German companies are likely to look for more opportunities there. Before a decision to invest is made, companies always asses its prospects. OLI framework is often used to see whether FDI is justified. OLI’s critics now say that there should be some additional analysis involved in decision-making, because, as good as the paradigm is, it still cannot explain every complex aspect of international business. References Caves, R. (1971). International Corporations: The Industrial Economics of Foreign Investment. Economica, Vol. 38, pp. 1-27 Datamonitor (2011). Automotive Manufacturing in China http://360.datamonitor.com.www.baser.dk/Product?pid=10C672D5-7559-4A0A-90B3-5EFBDF97D73C [accessed 31 March 2014] Dunning, J. (1977). Trade, location of economic activity and the multinational enterprise: A search for an eclectic approach. University of Reading diuscussion papers in international investments and business studies, no. 37 Eden, L. (2003). A Critical Reflection and Some Conclusions on OLI. Vox Professori. http://www.voxprof.com/eden/Publications/Eden-Reflections-on-OLI-2003.pdf [accessed 1 April 2014] Foreign Direct Investment in China – Good Prospects for German CompaniesChina Special (2004). Deutsche Bank Research. http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000196028.PDF [accessed 30 March 2014]Grubel, H. (1968). Internationally Diversified Portfolios: Welfare Gains and Capital Flows. American Economic Review, Vol. 58, pp. 1299-1314. Hymer, S. (1976). The International Operations of National Firms: A Study of Direct Investment. PhD Thesis. Massachusetts Institute of Technology Kindleberger, C. (1969). American Business Abroad: Six Lectures on Foreign Direct Investment. Yale University Press Lall, P. and Streeten, S. (1977). Foreign Investment, Transnationals and Developing Countries. London: Macmillan Li X. (2000). Foreign Direct Investment in China: The Importance of Market Entry Timing. The Haworth Press, Inc Lynn, W. (2008). The OLI Framework Temple University. Lecture Notes. http://astro.temple.edu/~pippin/oli.htm [accessed 30 March 2014] Narula, R. (2010). Keeping the eclectic paradigm simple: a brief commentary and implications for ownership advantages. United Nations University. Working Paper Series. https://www.google.com/#q=Narula%2C+R.+(2010).++Keeping+the+eclectic+paradigm+simple%3A+a+brief+commentary+and++implications+for+ownership+advantages [accessed 30 March 2014] OECD (2008). OECD Benchmark Definition of Foreign Direct Investment, 4th Edition, pp. 1-241 Shatz, H. and Venables, A. (2000). The Geography of International Investment. Policy Research Working Paper, Vol. 2338, The World Bank, Washington, D.C. Vernon, R. (1966). International investment and international trade in the product cycle. Quarterly Journal of Economics, Vol. 80, pp. 190-207 Volkswagen Annual Report (2010). http://www.volkswagenag.com/vwag/vwcorp/info_center/en/publications/2011/03/Volkswagen_AG_Geschaeftsbericht_2010.-bin.acq/qual-BinaryStorageItem.Single.File/GB_2010_e.pdf [accessed 31 March 2014] Volkswagen official website (2011). With a new sales record Volkswagen Group China, http://www.volkswagenag.com/vwag/vwcorp/info_center/en/news/2011/01/With_a_new_sales_record_Volkswagen_Group_China.html[accessed 31 March 2014] Wolf, B. (1977). Industrial Diversification and Internationalization: Some Empirical Evidence. Journal of Industrial Economics, Vol. 26, no. 2, pp. 177-191. Yu, Q. (2010). BlueMotion’ powers VW to save energy, boost sales. http://www.chinadaily.com.cn/business/2010-12/20/content_11728087.htm [accessed 31 March 2014] Additional Resources Chunlai, C. (1997). The Location Determinants of Foreign Direct Investment in Developing Countries. The University of Adelaide. http://www.rrojasdatabank.info/97_12.pdf [accessed 30 March 2014] China (2013). German Federal Foreign Office. http://www.auswaertiges-amt.de/EN/Aussenpolitik/Laender/Laenderinfos/01-Nodes/China_node.html [accessed 30 March 2014] Franco, C., Rentocchini, F., Marzetti, G. (2008). Why Do Firms Invest AbroadAn Analysis of the Motives Underlying Foreign Direct Investments. University of Bologna and University of Trento. http://www.etsg.org/ETSG2008/Papers/Franco.pdf [accessed 30 March 2014] World Economy FDI: The OLI Framework. University of Oxford. http://users.ox.ac.uk/~econ0211/papers/pdf/fdiprinceton.pdf [accessed 30 March 2014]

Grilled cheese math assignment Essay

In our problem for the week of special topics were are given a problem regarding achieving a best time to make grilled cheeses in a efficient manner in the shortest amount of time. The problem states; You need to make five grilled cheese sandwiches. You have a grill that is large enough to toast two sandwiches at a time. The sandwiches must be toasted one minute on each side. It takes 3 seconds to flip a sandwich and 5 seconds to take one off or put one on the grill. What is the shortest time needed to toast all five sandwiches? So with the information given we can conclude that the sandwiches have to be toasted at least 5 mins so it is obvious we cant get anything lower then 5 mins. Next we make an assumption that we can flip two sandwiches at the same time as well as take off and put on two sandwiches as well as take off two sandwiches all simultaneously. So the best way to solve this problem would be to first simpify the problem so that it is easier to see the soultion. So I decid ed to label the grill cheeses. Each side is denoted by A, B,C, D, E. So assuming the time starts for for the countdown when the two sandwiches are put on the Grill. Step 1: A B toasted one side 1 min =1min Step 2: Now Remove B and put C 5sec+5sec+3sec=13 sec( for removing B 5 sec + put C 5 sec+ flip A 3sec) Step 3 A C toasted on grill 1 min =1min Step 4: Now Remove A(completed) and put D 5sec+5sec+3sec=13 sec ( for removing A 5 sec + put C 5 sec+ flip C 3sec) Step 5 C D toasted on grill 1min =1min Step 6 (remove C(completed) ,put E, flip D) 5sec+5sec+3sec=13 sec Step 7 D E toasted on grill toasted 1 min =1min Step 8 remove D(completed), put B , flip E 5sec+5sec+3sec=13 sec Step 9 B E toasted on Grill 1 min =1min TOTAL = 5 min. 52 sec The process stops as all the five sandwiches are toasted, time is not counted for not taking the A and E off the grill. So the shortest time achievable needed for grilling all the five sandwiches as well as taking them off is 5 minutes and 52 seconds.

Anti-Inflationary Policies and the Issue of Credibility of Central Banks Essays

Anti-Inflationary Policies and the Issue of Credibility of Central Banks Essays Anti-Inflationary Policies and the Issue of Credibility of Central Banks Essay Anti-Inflationary Policies and the Issue of Credibility of Central Banks Essay Anti-inflationary policies are the policies taken by the government to announce inflation target lowering it to zero, in the beginning of the year, which at that time is considered optimal. The government wants to keep the inflation level low in an economy. It is the continuous rise in the general price level of goods and services over a period of time in an economy. As we know inflation can cause serious social consequences, if it’s not perfectly anticipated, money as a measure of value or as a medium of exchange is undermined.The issue of credibility The announcement of the government of anti-inflation will form expectations and be embedded into contracts. Wage contracts are also signed in this period. In this circumstance, the policymaker has a chance to induce a surprise inflation leading to an increase in inflation level and a decrease in the level of unemployment. This may be desirable, particularly if the natural level of unemployment is consider ed too high from a social point of view, so that during the year a higher inflation would have been optimal.And as this has been undertaken by the government a number of times, the announcements are not considered credible. The private sector can foresee the consequent move by the government and does not take into account the announcement, since in the past the government induced surprise inflation, although this inducement is not the response to any change in the environment but the change in policy action of the private sector itself. This brings in the time-inconsistency problem, where there are considerable two players, private sector and the policy maker (here, government).Knowing that the final unemployment rate would be UN, the government choose to minimise inflation by promising to drive down ? to 0. The private sector then predicts the government’s final move and makes a choice regardless of the policy and forces the policy maker to make the final decision at ? gt; 0 , which means accommodating positive inflation with no gain in unemployment level: inflationary bias. And countries with high inflationary bias are said to have the credibility problem as the private sector realise the government’s incentive for inducing surprise inflation.This lack of credibility leads to an undesirable aftermath. The monetary authority will have to accommodate higher wage pressures and inflationary expectations in order to keep the unemployment level in control. Although, according to the literature by Kydland and Prescott in 1977 the credibility problems occurs when the monetary authorities have the short run incentive to achieve an output or employment target that is above the NAIRU OR market-clearing level. It can even arise in the absence of conflict of objectives between the private sector and policy maker.The time-inconsistency also arises even if policy maker decides to stabilise the economy at NAIRU but with forward-looking variables like inflation or long-run interest rate or even exchange rate. Solution to time-inconsistency problem The main solution to this time-inconsistency problem causing an inflationary bias, could be a constitutional rule, or a central bank independence combined with an optimal inflation contract (Walsh,1998) or an optimal inflation target (Svensson,1997a). And it is Rogoff who has proposed to delegate monetary policy to an independent and conservative central banker to reduce the inflationary bias.This meant that inflation stabilisation would be given up for output stabilisation. The numerical analysis below explains how the degree of independence and conservativeness effect the level of inflation. (Berger, Haan Eijffinger,2000) The policymakers seek to minimise the loss function of the government which is †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦ is output †¦Ã¢â‚¬ ¦ is desired output †¦.. is gove rnment’s weight on output stabilization Lucas supply function by which output is driven is †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦.. is actual inflation †¦.. is expected inflation †¦is a random shock with mean 0 and variance†¦ Taking the inflation expectation as given, the policy makers minimise the loss function on a periodic basis. With rational expectations inflation is: †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ The first term on the right hand side is the ‘inflationary bias’ and the second term reflects to the degree to which stabilisation of output shocks influence inflation. If a conservative central banker is charge of the monetary policy the loss function would be †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦.. is additional inflation aversion of the central banker.According to Eijffinger and Hoeberichts ( 1998), the money supply can be modelled as: †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦.. is the degree of central bank independence. So, after minimising government’s loss function, with rational expectations, inflation will be depicted as†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Comparing the inflation level it can be seen that the inflationary bias is lower for positive values of †¦.. and †¦Ã¢â‚¬ ¦ It does show that lower level of inflation will be achieved by delegating monetary policy to a conservative and independent central bank.But if the central banker and the government has the same inflation aversion, (? =0) the independence does not matter and in the same way, if the central bank is fully controlled by the government, (? =0) the conservativene ss does not matter, unless it is the optimal combination of ? and ?. However, McCallum (1995) criticised this solution of reducing inflation bias. He argued that delegation barely relocates the time inconsistency problem rather than resolving it, since the government can still induce surprise inflation if it changes the terms of delegation.But, the time inconsistency problem is reduced to some extent if it’s costly to change delegation. Then again the central bank independence is also dependent on the legislators who can change the law. Legislation of a law to create an independent central bank and authorise it to direct its policies to achieve price stability is one of the mechanisms to overcome the incentive problems of monetary policy. Others include the contracting approach, where application of ideas from principal agent literature is the optimal contract.According to Walsh(1995), an optimal linear inflation contract can eliminate the inflationary bias without distorting the stabilisation policy. And the linear contract can be mapped into an inflation target shown by Svensson(1997). But the problem that occurs with this is that when the inflation is high, the government has no incentive to enforce the contract, it will try to encourage the central bank to be more expansionary when there is high unemployment. According to the empirical evidence it has been seen that central bank independence (CBI) helps to reduce inflation.Cukierman stated that in industrialised countries, CBI and inflation are negatively correlated although in developing countries the CBI index is not correlated with inflation. The cross-country analysis showed an empirical link between credibility and central bank independence. High degree of CBI is said to be associated with low inflation and the economies do not suffer from above-average output volatility. Although the direction of causality is questioned and Posen(1995) suggested that it goes from low inflation to high CBI rath er that the normally assumed ‘high CBI helps to control inflation’.Societies with a stable economic environment are likely to encourage and support independent monetary institutions which, in turn are more effective in controlling inflation. Although the cross-sectional analysis might show misleading results since it omits country-specific features which might be simultaneously correlated to the degree of independence of the central bank(Muscatelli Trecroci, 2000). Theoretically the concept of conservativeness in central bank might work, but practically, it seems void because the positions in the governing board of a central bank are not easy to identify and they change term-wise.Cukierman and Grilli et al. showed that instrument independence effects inflation performance but conservativeness has little or no impact. The emphasis is on the importance of institutions is mixed and the cross-country evidence involves problems of interpretation. Optimal inflation targeting Another measure, inflation targeting can be used to reduce the inflationary bias and many countries has adopted this as their monetary policy regime. It enables the monetary policy to focus on domestic considerations and also is understood by the public and thus highly transparent.With an explicit inflation target, this regime helps to reduce the chance of the central bank to falling in a time-inconsistency trap. And since time-inconsistency is likely to come from political pressures, the central bank can focus on controlling inflation rather than rising economic growth and the number of jobs through expansionary monetary policy(Mishkin,1999). Friedman and Kuttner(1996) have criticised the regime of inflation targeting because, according to them, it imposes a rigid rule on the policy makers and makes it difficult for them to have discretion in responding to unforeseen circumstances.But according to Mishkin(1999) useful strategies those are ‘rule-like’ and involve forwar d looking behaviour, constrains policy makers from undertaking policies with undesirable long-run consequences. Inflation targeting requires that the central bank should use all information available to determine the optimal policy to achieve the inflation target. And it is practised with a substantial degree of discretion. Through its transparency this regime increases the central bank’s accountability, which contains discretion so that it can help to amend the time inconsistency problem.Conclusions According the evidence provided, we can see that both independence and conservativeness matter for inflation performance, provided that the government cannot change delegation at zero cost. The issue of credibility of policies takes the government’s reputation of an economy at stake and causes the time-inconsistency problem. Pressures from government might force the policymakers to take decisions that lead to reduction in the unemployment level at the expense of high infla tion.If the monetary policy is delegated to an independent and conservative central bank that is more accountable, transparent and free from political pressures it can focus on the long-run goals of an economy which is price stability and set policies accordingly and not change its decisions from time to time for a short-run incentive like reduction in the unemployment level. And thus the credibility issue would not be questioned. The private sector learns about the central bank’s intentions through central bank independence.

Critical Thinking Essay Sample

Critical Thinking Essay Sample Critical Thinking Essay Sample What it means to be human in ancient Israel: Israelites are a group of people in the Middle East who believe that they are all descendants of Jacob. The Israelites are perhaps the only people with a well recorded history dating back to 6000BC; their history is well written in religious books such as the Quran and the bible. In the olden days being an Israelite was a hard thing as you had to live according to the standards set by the leaders and the God that was never seen, most people suffered as there was no democracy. The Israelites were ruled by kings who had super special powers and no one was authorized to question their judgment. To them, the kings were a level lower than God and therefore deserved to be respected. The people of Israel were monotheists, meaning they worshiped only one God but sometimes they ended up worshiping the gods and goddesses of the surrounding people. According to their religious beliefs, it was clearly stated that one should worship only God despite that some went against the rule. However, there were serious consequences attributed to that. For instance, anyone found worshiping another god was stoned to death outside the city and in the case where the whole group was found to worship other gods it resulted in mass punishments that would sometimes lead to death. The Israelite community constituted of twelve tribes. Among these tribes was the Leviticus where the entire priests were chosen from. The Levites only become priest and they were not required to do any duties other than their temple work. Furthermore, they had no land and therefore depended on the other tribes for food who had to give out one tenth of their produce to the Levites. This can be seen as some form of exploitation of the people of Israel as others had to work and use their hard work to feed the people who had been chosen by god. Despite this, they highly believed that it was the right thing to do before God. In Israel, most people were farmers and lived in small villages while a small number lived in towns. However, the towns were much smaller and underdeveloped than the modern day towns. Markets were always held in the gateways of the towns. The life of most Israelites however revolved around worshiping and most of the time they were either doing service to god or praying to god for forgiveness. The Israelites had rules that were supposed to guide them throughout their life; these rules were known as the commandments. These had to be followed strictly failure to which they would be punished severely. Moses one of the early Israelites, was given these rules by god while on top of Mount Sinai, alone meaning no one was there to witness him being given the rules. This means that the people had to live and abide by the rules that they did not have a chance to even vote for and make a decision yet no one was supposed to go against them failure to which lead to death. This can be seen as some form of dictatorship as only one person was to be heard and if anyone went against him it automatically led to death. Death penalties were common in Israel (the bible, exodus) and many crimes resulted in death, especially crimes that were related to religion. This is ironical as the same person (God) who created the people could be so mercy less and set rules that took away the life that he made. This can be seen as rules that were set by selfish leaders so as to make the people not to question their performances and believe that they had been chosen by god and so everything they did was right. Leadership was highly respected in ancient Israel and no one was supposed to go against the leaders and anyone found to go against the leaders was persecuted by stoning. Yet these leaders were not chosen or elected by the people the leaders were chosen by God and they had to be from some families. Sex before marriage was an abomination and any person found having sex without getting married would be killed. To some point this rule was good but the punishment was too harsh for the crime, homosexuality would also lead to a death penalty this was wrong because it led to death yet life was supposed to be respected. The common man had no excuse for sinning and if he was found to have sinned it would result in heavy punishment. On the other hand leaders could sin and get away with it take an example of David who killed a man for his wife but because he was loved by God he was forgiven, if he had been a common man then he would have been killed without questioning(Harmer 89). Gender inequality was common and women were looked down upon, they held no positions in the political posts and had to do whatever the men said the woman had to respect the man and had to get married and have children a woman who had no children was considered cursed even if the husband was the cause of the problem. Prostitution was not allowed and any woman found was killed yet the man was not killed. This is very unfair to women as all of them had sinned and not the woman alone so why kill the woman alone and not all of them. War was common in ancient Israel and the local people did not decide when to go to war. This was a decision that was made by the leaders as they were the once to decide when to go to war and when not to go to war. Soldier’s war picked from every family who had to give a son to defend the people, even though this is not wrong it is still wrong considering the fact that during war people would die. However the soldiers had to go to war and incase of death there was no compensations that was made to the family. In conclusion it is evident that the people of Israel suffered a lot and this was mainly because of their leaders who were believed to be God chosen yet they were just ordinary people. Life was unfair for the common man and they had to live in fear of death as most simple crimes would lead to death by stoning, and no one was allowed to question those in authority as they were believed to be chosen by God. If you are looking for professional essay writing services to get your critical thinking essay written by certified academic writers contact www.!

Othello Essay Example | Topics and Well Written Essays - 750 words - 5

Othello - Essay Example The heart of Othello is opened for Desdemona, but his mind remains closed. We can see that love is different with different characters of the play. The main hero Othello understands that trust is very important thing in marriage and it can’t be built in one day. However, his foes acted too rapidly and did not give him a time to build trust. The deep feeling of Othello and Desdemona appeared instantly and was built mostly on passion, but Desdemona managed to turn it into strong attachment not realized by Othello: "It cannot be true that she really loves me†¦if she loves me, then there must be something wrong with her" (Shakespeare). Desdemona succeeded to protect her marriage in the face of her family. She protected her choice before Brabantio and Gratiano, praising her husband’s best qualities. Othello was clever and purposeful. He proved to be a successful leader and commanded deep respect his people. Within the play, Desdemona’s character transforms gradua lly. Having married Othello, Desdemona acted against her father’s will and in the teeth of the Renaissance public opinion. She is â€Å"a woman who combines spiritual and physical love for Othello and who is courageous and independent in her judgments, often stubbornly so† (Hall, 1999: 67). Firstly, she had fully relied on her father, but in her married life, she had to submit to her husband. On Cyprus, she supported him in career making and dealt with household with pleasure. Othello really loved his wife, their marriage was concluded due to deep love and passion. However, this passion was too strong and he could not control its power. It captured him so deeply that he did not want to see the truth. Jealousy is the power that appeared to kill Othello. It was Iago who helped this destructive feeling occupy the soul of the mail hero of the play. Stupid Iago thought that he knows everything about jealousy but he did not take into

Taxation Research Paper Example | Topics and Well Written Essays - 1500 words

Taxation - Research Paper Example Many industrialized countries have been developed the system of health insurances while United States lacks this system. Based on this issue it is evident that the size of public sectors varies considerably from different countries. Comparison of the economies in Russia and United States The economic relationship between Russia and the United States ended a long time, and there are no aspects of mutual destruction (CHERNIAVSKII, and VARTAPETOV 18). However, Russians have remains as the major economic powerhouses, and they have played a major role in the world stage. Russia has an improved culture history, and at times, it has been described as the military agency. However, according to Americans, it has remained an undiscovered country with numerous resources. The economic status of Russia has been in a fluctuation state compared to the United States, based on the Bolshevik revolution although it is interesting to note that differences in geographic population and the military role h ave a major contribution on the entire economic population (McConnell et al. 29). Economic ties between Russia and the United States are important since they provide stability to the broad bilateral relationships among the two countries. Stable political relationships have been developed by economic integration. ... It is evident that several measures have been developed, and they are not less important that the US economic relationships with other developing markets. Government spending as a percentage of GDP Over the past couple of years, it has been noted that trade between Russia and US has developed fast, although it is rated to be on a low level. Since the year 200, the export of US to Russia have increased by an estimated of 22% annually while US imports from Russia have increased to 19% annually. On a basic analysis, it is evident that Russia has contributed to 0.7% of the US exports and 1.3% of imports in the year 2008 (Serguey and Batkibekov 47). The trade between Russia and US has been analyzed through inter-industry trade that accounts for the difference between imported and exported goods, and the intra-industry trade that accounts for similar imports and exports. Considering the different industrial structure and resource bequest of Russia and the US, it is evident that the US-Russ ia trade entails of inter-industry trade (CHERNIAVSKII, and VARTAPETOV 28). It has been noted that the large trade items in inter-industry trade has been accredited to 90% of the improvement of US-Russia trade (Papadimitriou 49). Considering the dominant export and import goods from US, it is evident that the most popular goods from US to Russia include nuclear equipment, vehicles and meat products. However, the largest imports to the US from Russia include mineral fuels, aluminum and inorganic chemicals. The US-Russia economic relations on international perspective gauge whether it has declined through comparison to bilateral relations. This is done, because the US has investments with other countries, such as